The main objective is to develop a mechanism to improve the financial performance of the power entities with specific focus on substantial reduction of the entities' receivables and debt service liability, on prudent information flow, authentic accounting procedures, improvement of cash flows and collections etc. A financial model will be required to develop to consider various scenarios based upon several performance parameters to assess investment requirements and financing options. A financial restructuring and dated recovery plan will be prepared for implementation. The work on financial restructuring would provide critical information to also design the overall restructuring plan of the sector

In order to develop a framework to monitor and improve the financial performance of the power sector enterprises, the following specific mechanisms should be to accomplished (i) enhance enterprise revenues (though non-tariff and reasonable tariff measures); (ii) reduce operating and financial costs (through optimal utilization of assets, debt restructuring and better accountability); and (iii) meet the demand for reliable electricity supply in an affordable and sustainable manner. A credible financial model for the sector will be the analytical tool for shaping the financial recovery plan through an iterative process of scenario analysis, discussion with key stakeholders, implementation, monitoring and feedback cum refinement. The financial recovery plan and its implementation strategy will be used to shape sector policy and the overall restructuring plan for the sector (being undertaken separately).