Centre, World Bank signs $470-mn loan agreement for T&D networks

New Delhi, Nov 28: The Centre, POWERGRID, the six north eastern states of Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura and the World Bank today signed a 470-million-dollar loan agreement to support these six states to augment their transmission and distribution (T&D) networks and strengthen the capacity of the state-level power utilities in extending last mile electricity connections to households.

“This project will strengthen and augment the intrastate transmission, sub-transmission, and distribution networks by upgrading old and constructing new lines and associated substations in the six participating states of Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. These investments will allow the transmission network to transfer electricity more efficiently and with minimum wastage, and help the utilities supply reliable electricity at a stable voltage to consumers,” said Rajkumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance.

The existing power network infrastructure in the six participating states of Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura is old and has not been adequately maintained.

This makes it prone to high technical and non-technical losses and leads to frequent interruptions and outages in power supply.

In addition, most of the utilities incur commercial losses due to inadequate cost structures and tariffs. “The north-eastern region, which is well-endowed with rich natural resources, is now aspiring to catch up with the rest of the country in growth and investment climate,” said Hisham Abdo, Operations Manager and Acting Country Director, World Bank India.

“The project will support the six northern eastern states get better access to power, allow businesses to grow, and jobs to be created for the overall economic development of the region, currently constrained by power shortages,” he added.

The north-eastern region has a very small and underdeveloped power system. The annual per capita power consumption in the region is around one-third of the national average while household electricity access rates are less than the national average.

While generation capacity is slowly being increased, there have been inadequate investments in the transmission, sub-transmission and distribution network in the region because of a combination of factors, including limited financial resources.

“The project supports transmission and distribution investments that will increase the availability of power in the participating states and hence create the conditions for the expansion of electricity access to unserved households. Further, increased availability of electricity supply will help spur growth of its productive uses in the region, leading to inclusive growth, and sustainable development,” said Rohit Mittal, Senior Energy Specialist and Kwawu Mensan Gaba, Lead Energy Specialist and World Bank’s Task Team Leaders for the project.

The loan from the International Bank for Reconstruction and Development (IBRD) has a 5-year grace period, and a final maturity of 24.5 years.(UNI)

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