The Damodar Valley Corporation (DVC), India's first multipurpose river valley project, will be corporatised and divided into three entities focusing on transmission, generation, and distribution to enhance efficiency, an official announced. Union Power Minister Manohar Lal, during a review meeting at DVC headquarters, urged the corporation to expedite the unbundling process.

He also recommended that DVC consider an IPO to raise resources for expansion plans.

DVC operates under the Ministry of Power and was established in 1948. It spans a command area of 24,235 sq km in West Bengal and Jharkhand. "The corporatisation plan has been on the agenda, but the minister emphasized accelerating the process. The existing shareholding among the Centre, West Bengal, and Jharkhand governments will remain unchanged," said DVC Chairman S Suresh Kumar.

A source noted that the interests of the Centre and the two states are almost identical. DVC aims to add nearly 10,000 MW in thermal and green energy, increasing its total capacity to around 16,700 MW. This includes 3,720 MW of thermal power, 4,000 MW of solar power, and 2,500 MW from a pump storage power plant. The total capital expenditure is estimated to be between Rs 500-600 billion.

DVC currently has an installed capacity of nearly 6,700 MW, with 6,540 MW from thermal power. The minister emphasised the need to increase the renewable energy share in DVC's portfolio. Presently, DVC has a small green energy portfolio and is developing a 310 MW solar plant with NTPC.

During the meeting, DVC raised concerns about grade slippages in coal supplies from Coal India subsidiaries, affecting generation costs and power tariffs. "We have updated aspects of the Fuel Supply Agreement for coal to meet demand and sought the ministry's help in signing Power Purchase Agreements for future capacities and recovering legacy dues," a source said.

DVC has approximately Rs 3-4 billion in legacy dues from the Jharkhand state government out of a total of Rs 10 billion. DVC officials reported that the minister was cooperative and assured the corporation that operational and financial issues would be addressed at both departmental and government levels to ensure smooth functioning.

The minister also expressed full support for DVC's expansion plans and overall growth to significantly contribute to sustainable development in India.

Of DVC's nine thermal and hydel power stations, five are located in Jharkhand and the rest in West Bengal. (Source: ET)