ADB approved USD132.8 million loan for Power Distribution network in Meghalaya

The Asian Development Bank (ADB) has approved USD 132.8 million loan for power distribution sector in Meghalaya. The loan would be utilised to improve and upgrade the power distribution network in Meghalaya. This will support the Meghalaya’s initiative to improve the distribution system and financial sustainability of the power sector.


The Meghalaya cabinet in August 2020 approved a proposal of Meghalaya Energy Corporation Limited (MeECL) to get a loan of Rs 1,345.72 crore. These loans were to be utilized in clearing the power outstanding dues. Loan was to be provided on a condition to bring down the aggregate technical and commercial (AT&C) losses.

Why this condition was put?

The condition to clear the dues was put because, the Meghalaya Power Distribution Corporation Limited (MePDCL) has a outstanding dues against the power purchased from central power generating stations and Power Grid Corporation of India Limited (PGCIL).

How government has helped the stressed discoms?

Government of India under its Aatma Nirbhar Bharat Abhiyaan (ANBA) scheme has announced to infuse the liquidity to the stressed distribution companies (DISCOMS). The liquidity was to be provided in the form of loans. These loans were to be backed by state government. State government provides a guarantee to clear the liabilities of the generation companies and transmission companies by the state DISCOMs. Further, the Rural Electrification Corporation (REC) and the Power Finance Corporation also  extended the special long term transition loans for 10 years to the DISCOMs under the Aatma Nirbhar Bharat Abhiyaan scheme.