Feedback Electricity Distribution Company (FEDCO), a subsidiary of Feedback Infra Ltd., is planning to expand its operations in the domestic and international markets to capitalise on the demand for efficient electricity distribution, a top company executive said.
“We have plans to expand in Odisha,” Devtosh Chaturvedi, MD, FEDCO said in an interview.
“We have started working in Madhya Pradesh and are looking for more opportunities there. We are exploring the possibility to get into other states like Uttar Pradesh and West Bengal. We may choose [to enter] one of these states,” he said.
“In international shores we are focused in Nigeria. We have started work in two of the discoms. In Nigeria’s move towards privatisation, we are their technical service partner helping to reduce losses. We are expecting more work there.”
He said the company, which entered Nigeria five months ago, had a five-year mandate. “They are very impressed by our approach in Odisha where our customer connect [has helped] reduce losses and increase collections.
‘Bringing about change’
“This we have achieved despite 90% of our consumers coming from in rural areas where bringing in changes is difficult. Nigeria needs this badly,” Mr. Chaturvedi said.
Currently, the company is serving 5.5 million customers in Odisha where it began operations in 2013. The company handles one of the four discoms in the eastern state. It is now looking to expand its operations in some of the other discoms.
The company, which has made an investment of ₹170 crore in its Odisha operations, has managed to reduce transmission loss to an average of 23%, from a base number of 56%. Consumer collections have increased from ₹198 crore to ₹398 crore as on March 31, 2017.
On investment plans, he said, “Currently different models are prevalent in the power sector. We are in favour of a zero or calibrated capex model. However, depending on the area, the model and size, we will decide. Project costs can vary between ₹200 crore and ₹1,000 crore and capex requirement will vary from project to project.”
‘Huge opportunities’
Commenting on the opportunities in the sector, Mr. Charurvedi said, “It is huge. Two years back, distribution sector faced a combined cash loss of ₹1 lakh crore which is huge. Not even 50 private players can solve this problem. A large part of the solution lies with the government,” he said.
“Our job is to add value in places where the collection is low and distribution losses are high. There is a time constraint. You have to reduce losses within a period.
“Today, government discoms are struggling with their consumer and employee ratio as most employees have retired and there is no fresh recruitment. This is affecting services. So, market opportunity is never a constraint in our space,” he added.
