Power sector unfazed by currency ban: Power Grid

Where sectors all across are impacted by demonetisation, the power sector of India remains untouched by the effects of this cash ban, says IS Jha, CMD of Power Grid Corporation.

The state-owned utility company posted a good set of second quarter earnings and has sees its performance improving once the health of discoms stabilises.

Jha told CNBC-TV18 that the company has already planned funding for its Rs 23,000 capex target.Below is the verbatim transcript of IS Jha's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: Before I ask you about your own earnings, wanted to understand whether the power utility segment is getting hit in any way because of the demonetisation scheme by the government?A: I don’t think power utility or any distribution company (DISCOM) is hit by the demonetisation because here everything is done through electronics or cheques. Even in Power Grid for transmission and what we compensate all are done through Jan Dhan Yojna or electronic payment. That is why the power sector market has not hit by the demonetisation.Latha: Are you positively impacted because we have seen the State Electricity Boards (SEBs) get a lot of money because they were accepting the old notes. More importantly you can raise money now from the market at dearth cheap rates. So will you accelerate your capex?A: Yes, capex is as per the plan. We have planned to do that capex of Rs 23,000 crore. For that everything is already tied up.Little bit addition -- we will certainly go in the market and that is not changing on a day-to-day basis. Whatever the gain we will get from the interest, it will be passed to the distribution companies. That is why it is good for the distribution companies.Latha: Expectation is that the government would probably give some kind of a fiscal boost. If that happens and if you are able to raise cheap money or you get more money from the government from the fisc, will you be able to, for instance, double your execution or increase your execution by 15-25 percent?A: Money -- the wanting is important. You get the money from the distribution company and if our distribution company gets healthier, certainly the performance of Power Grid will improve. The way of improving the performance of distribution companies is basically if the interest on the capital gets reduced and that certainly it will be passed to the customer and it will help in improving their financial conditions.As far as execution is concerned, it is already on track and overall if system improves, certainly efficiency comes but whatever our target is of Rs 28,000-30,000 crore -- we are targeting that. Everything is going in positive direction.