Plan panel proposes setting up of National Electricity Fund

NEW DELHI: The Planning Commission has proposed setting up a National Electricity Fund with a corpus of Rs 1,00,000-1,50,000 crore to finance development of power transmission and distribution (T&D) network by state utilities so as to reduce T&D losses.

"We have settled all issues with the states and have firmed up a report, which would be sent to (the) Ministry of Power for setting up a National Electricity Fund with a corpus of Rs 1,00,000-Rs 1,50,000 crore," Planning Commission Member B K Chaturvedi told PTI.

"The idea behind setting up this fund is to reduce T&D losses in the next three years to 15 per cent by setting up new electricity transmission lines, transformers, replacing overloaded lines and using new technology," he said.

Chaturvedi is heading a panel which was set up to submit a report on modalities for the National Electricity Fund's operations. In a meeting held on Wednesday evening, the report was given final shape.

State-run Power Finance Corp and Rural Electrification Corp would be the nodal agencies to finance state utilities. The agencies would raise around Rs 30,000-40,000 crore every year from the domestic market and financial institutions.

The Government would help the agencies through interest subvention.