India is contemplating a financial bailout for its heavily indebted government-owned power distribution utilities, according to the country’s Ministry of Power.
The move aims to stabilise the sector amidst increasing power demand. There are 65 state-run power distribution companies in India.
The document proposes establishing a group of ministers to identify states needing urgent financial support and suggests measures to attract private investment, according to a report from Reuters.
The proposed bailout marks the first federal intervention since 2021 when the government allocated $35bn to state power utilities.
The Ministry of Power also recommended privatising these utilities, which are struggling with rising power-purchase costs, high transmission and distribution losses, and delayed customer payments.
As of March 2023, state-run distribution companies had accumulated losses of $75bn – 2.4% of the states’ GDP.
“The financial health of distribution companies is crucial for sustaining a reliable and uninterrupted electricity supply to consumers,” the Ministry of Power document states.
It highlights challenges such as inadequate tariff structures, rising procurement costs and operational inefficiencies.
The ministerial group first met on 30 January 2025 and plans to reconvene in late February to discuss a financial package for the utilities.
India has also surpassed 100GW in national solar power capacity, reinforcing its commitment to a sustainable future and its goal of 500GW of non-fossil fuel-based energy by 2030.
The solar sector has grown significantly, with capacity increasing from 2.82GW in 2014 to 100GW by 2025.
As of 31 January 2025, India’s total installed solar capacity reached 100.33GW, with an additional 84.10GW under implementation and 47.49GW under tender.
Eco Wave Power has recently signed a memorandum of understanding with Bharat Petroleum to explore India’s wave energy potential, estimated at 40,000MW.
The agreement was announced at India Energy Week 2025, held in New Delhi from 11 February to 14 February, and aims to integrate wave energy into India’s renewable energy mix.
