Overview
- A draft proposal reported by Reuters makes access to federal funds contingent on states privatising distribution operations or listing utilities on a stock exchange.
- States would ensure private companies supply at least 20% of total power consumption and would assume part of distributors’ debt to qualify.
- One route would create a new distributor with 51% divested, unlocking a 50‑year interest‑free loan and five years of low‑interest federal loans; another would sell up to 26% of an existing utility for five years of concessional financing.
- States that do not transfer managerial control would have to list their utilities within three years to access low‑interest loans.
- Linked reforms in the Electricity (Amendment) Bill 2025 would open state networks to private suppliers for nominal wheeling charges while universal supply obligations remain with public discoms, drawing warnings from unions about consumer impacts.