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KSEB bonds

MUMBAI: Credit Analysis & Research Ltd (CARE), has downgraded the Rs. 25 crores non-SLR bonds issue of the Kerala State Electricity Board (KSEB).

The bonds has been brought down to CARE A(SO) from CARE A+ (SO). The change in rating reflects deterioration in the performance of KSEB and finances of the State.

The bonds carry an unconditional and irrevocable guarantee from the Government of Kerala for payment of interest and repayment of principal, a CARE press release said.

Kerala has been traditionally dependent on hydro-electric power stations to meet its electricity needs. Off-late, due to erratic rainfall and slow progress in augmentation of hydel capacity, the share of generating stations in total electricity supplied in the State has been declining, said the release.

Rising dependence on costly thermal sources of supply has resulted in substantial increase in the cost of power supplied. The tariff structure based on cheap hydel sources of supply has yet to come to terms with the changing source of supply. Despite sub stantial tariff hikes over the past three years, KSEB's percentage of overall realisations to costs was amongst the lowest in the country. _ Our Bureau