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Centre to ink MoUs with states for power distribution reform

The Centre will sign MoUs with 16 states to reform power distribution set up of state electricity boards, Union Power Minister Suresh Prabhu said.

Financial bankruptcy of the SEBs is due to distribution problems. The government will provide assistance for reforming this segment and sign MoUs with 16 states in next few months," Prabhu said addressing a seminar 'towards removing road blocks in the power development'.

Prabhu said, "SEBs will get central assistance for instant and adequate reforms. Milestones for reforms will be defined and funds will be transferred to special accounts maintained by boards for this purpose."

The Central Electricity Authority was working on a

programme for each state and expects to sign an MoU with Kerala to start with by this month-end, he said.

Multilateral institutions, including the World Bank, have evinced interest in providing financial assistance for such programmes, the minister said, adding, that Power Finance Corporation with government support could raise funds from the international market for this purpose.

Expressing concern at the wide gap between cost of supply and cost of tariff of power, Prabhu said it was likely to touch Rs 500 billion this year.

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