"If MSEB takes a serious view on restructuring of the board, we will provide full financial assistance," PFC chairman and managing director Udesh Kohli told The Financial Express.

The board is understood to have been planning to restructure its present set up which regulates all three functions of generation, distribution and transmission. The ministry of power had already forwarded to the states a plan for restructuring electricity boards which was prepared in consultation with global experts.

The MSEB, which is yet to take the final decision on the issue, has discussed the recast plan threadbare with PFC. Kohli said the cost of recast depends on the model MSEB plans to opt for. Some of the states have already initiated a restructuring of their electricity boards. For instance, Orissa has successfully implemented the entire process by unbundling the board by setting up separate ventures for power generation, transmission and distribution.

"Orissa apart, Andhra Pradesh and Haryana models can also be considered by the MSEB. It is up to the board to develop a suitable model for restructuring its operations," Kohli said.

PFC is also willing to assist the board in formulating the recast plans including consultency and financial support.

MSEB, however, already has a restructuring plan pending with it which was prepared by Rajadhakshya Committee four years ago. The committee had then suggested corporatisation of the board and setting up separate divisions for power generation, transmission and distribution.

While Maharashtra has privatised power generation by allowing private companies to set up power plants in the state, power transmission and distribution sectors are yet to be opened up for private sector participation.

The board is toying with an idea of throwing open power transmission business in phases. It had appointed Infrastructure Leasing & Finance Corporation (IL&FS) to prepare a proposal for privatisation of transmission system in New Mumbai. However, a large section of employees are opposed to the idea of privatisation.

The urgency for the recast of the board was triggered by the battle between MSEB and various industry bodies on the issue of high tariff. In a legal battle with the industries associations, MSEB and the state government were instructed by the Mumbai High Court to expedite the reform process and set up the state electricity regulatory commission.

The recently set up Maharashtra State Electricity Regulatory Commission may also look into privatisation of eletricity board as part of its function to encourage competition in the sector.

PFC which provides finance to SEBs for their routine programmes also assists them in carrying out detailed study on various issues to help development of the sector. Of late, the funding agency has expanded its portfolio and has agreed to lend to private companies also.