Bharat Book

Power Distribution Franchisee Market in India

Press Release   •   Jul 30, 2012 14:36 IST

Input-Based Power Distribution Franchisee Market in India 2012Q1
 Brief Summary
 Various experts in power sector are of the opinion that in the coming 5 years, the Distribution Franchisee model is expected to grow manifold, thereby improving the power distribution scenario of the country. Power Distribution Franchisee – evolving Public Private Partnership (PPP) model has picked traction since 2009 after successful demonstration by Torrent Power Ltd. at Bhiwandi, Maharashtra, which got operational in 2007.
 The licensee (state utility) appoints a private company on the basis of rationale bidding for distribution of electricity in a specified area for specified years of contract. This Distribution Franchisee model stands midway between licensee and full PPP model and is considered as one of the major energy reforms in power distribution sector that has the potential to turnaround the sector and take electricity to rural areas as well. Power Distribution
 Out of the variants available, ‘Input based Distribution Franchisee’ model has recently seen an increase, currently with five cities across India, out of which distribution in three cities was handed over to private companies in 2011. Three new cities in MP have recently been franchised and undergoing handover, further boosting up the DF model. Input based Distribution Franchisee, by far, has been mostly used operating model in urban areas.
 Investments in this space are driven by the emerging nature of the ‘Input based Distribution Franchisee’ model which promises high returns, has low entry barriers, maintains proximity to end-consumers, involves high Capex with predictable cash flows and easy financial leverage when operating efficiently.
 Key Highlights of the Report are
 Current Market Scenario, its uptake and Upcoming Opportunities of Distribution Franchisee
 Key Functional Roles and Responsibility of Distribution Franchisee Operator
 Key Roll Out Challenges for Distribution Franchisee Operator across various stakeholders
 Case Studies of already existing Operators
 Bid Process description for distribution franchisees
 Evolution of RFP terms and conditions across various past DFs, with highlighting of critical risks
 Past bid analytics of DFs at Nagpur, Aurangabad, Jalgaon, Gwalior, Ujjain and Sagar
 Detalied Financial numbers derived using a base financial model for UJJAIN city (recent MP bid analysis)
 Sensitivity to different parameters like CAPEX, OPEX, Tariff Rate, Load Growth Rate, Price bid curve, etc.
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