In an interview with Outlook Money, Jayant Kumar, Director- Finance, National Hydro Power Corporation, tells about company's operations, UDAY scheme, future plans, and more. Excerpts:

What is going to be NHPC’s strategy to pare down the debts?
The structure of tariff is such that reduction of debt below the norm will not help much. The present cost of debt in NHPC is already on the lower side, i.e., at 9 per cent. We are exploring to see how much debt we can replace and are very much hopeful to reduce it further by about 200 basis points.

Can you share some of your upcoming projects and how much capacity will this add up to and by when will they get operational?
Clearances, local issues and land acquisition are playing a major role. We are going to add 330 MW capacity in Jammu & Kashmir in 2017. By 2018, we are expecting to add another 800 MW in Himachal Pradesh. These two power stations will generate around 3,500 MW of power and take our capacity to around 7,800 MW, which will be a 16 per cent increase. Another mega project of 2,000 MW in North East is expected to re-start during this financial year. Besides there are four projects having a total capacity of about 4,800 MW at different stages of clearances. We will have 10 GW capacity by 2022.

How is the UDAY scheme helping you with recoveries?
UDAY scheme has been quite helpful in our recovery process. Since UDAY is providing a sustainable framework to the discoms for getting resources, it will be useful in future too. Discoms of states like J&K, UP, Jharkhand, Rajasthan have immensely benefited under this scheme.

What were the challenges you faced during FY 2015-16?
Obviously the major challenges during 2015-16 were maintaining the pace of collection from the beneficiaries. Apart from UDAY, we had to take many other initiatives as well as persuade discoms for improving the collection. Efforts made by our management and substituted by UDAY have given good results. There were issues regarding tariff fixation in view of the downward trend in the market price of the electricity. This has been a very big challenge. Besides there was issue of contingent liability/claims and we did a lot of ground work which is going to pay dividend shortly.

What is the growth utility of hydro power sector in India and what are the upcoming trends one can expect in this segment?
Our country has assessed hydro capacity of 148 GW and so far we have exploited around 50 GW and still have about 100 GW capacity to be developed. Of course these are logistically difficult projects considering the terrain, accessibility, environmental issues and cost of power. On the other hand, hydro power is required for system reliability and environmental sustainability. The government is also taking new policy initiatives by declaring hydro power under the renewable energy category which will enable certain fiscal as well operational concessions to this sector.

olmdesk@outlookindia.com