Govt, ADB sign $48 mn loan to improve Assam’s power service
The Dollar Business Bureau
The Government of India and Asian Development Bank (ADB) on Monday signed a loan of $48 million to help the state of Assam to maintain its drive for improving the access to reliable and efficient power in the national capital.
The given loan is the second tranche of multi tranche financing facility of $300 million cleared by the ADB Board for Assam Power Sector Investment Program in July 2014. The Program will help the state to augment the efficiency and capacity of its power distribution system in order to improve electricity supply to end users, said an official statement.
The first tranche of $50 million loan was signed in February last year, it added.
While signing the agreement on behalf of ADB, M Teresa Kho, Country Director of ADB's India Resident Mission, said, “Increased access to reliable and modern power supply for remote communities can help meet growing demand. This loan will help strengthen the state’s distribution system, improve energy efficiency and reduce technical and commercial losses.”
Z Rahman Ahmed, Secretary (Power) in the Assam government along with P Gupta, MD, Assam Power Distribution Company Limited (APDCL) signed the agreement on behalf of the state government.
Raj Kumar, Joint Secretary (Multilateral Institutions), Ministry of Finance signed the loan agreement on behalf of the Government of India. He said, “In the current scenario when a sustainable supply of power is crucial for facilitating growth and generating opportunities for employment, this power project will aid Assam state to attract investment and tap its potential for economic growth, in addition to cutting power outages.”
The project is likely to be concluded by December 2019 and will help the APDCL to add an extra substation capacity and enhance medium voltage network, cut system losses by around 3% and increase energy efficiency by renovating and modernising the prevailing 33/11 kV substations, the statement said.
The $48 million loan from ADB makes up to 80% cost of the overall project of around $60 million, with the state government providing counterpart fund of $12 million. The loan is for a 25-year period, which also includes a grace period of five years with an annual rate of interest to be determined in line with the LIBOR-based lending facility of ADB, it added.