The Asian Infrastructure Investment Bank (AIIB) and the Indian government have signed a loan agreement for Assam Intra-State Transmission System Enhancement Project. It is a $304 million project aimed at improving the capacity, reliability, and security of the power transmission network in Assam.
Key Points
- The total estimated cost of the project is $365 million.
- Out of the total amount, $304 million will be financed by the AIIB, and the remaining $61 million will be borne by the Assam state government.
- This AIIB loan for the project has a 5-year grace period and a maturity of 24 years.
- The project is aimed at strengthening the state’s electricity transmission system by constructing 10 transmission substations and laying transmission lines with the associated infrastructure; upgrading 15 existing transmission lines, substations, and existing ground wire to optical power ground wire.
- The loan agreement was signed by the Department of Economic Affairs, Ministry of Finance Joint Secretary Baldeo Purushartha on behalf of the Indian government, and Rajat Misra, Acting Director-General, Investment Operations on behalf of the AIIB.
- At present, Assam witnesses substantial energy and peak demand deficits. One of the main reasons for the power-deficit scenario in the state is congestion of the electricity distribution and transmission networks.
Assam Electricity Grid Corporation Limited (AEGCL) is responsible for the operation, maintenance, and development of the transmission system in the state. AEGCL is the sole transmission utility in the state.
AIIB vice-president DJ Pandian said that the bank’s investment will improve the capacity, reliability, and security of the power transmission network in Assam. The project will also help in improving the quality of power supply to consumers and will also reduce greenhouse gas emissions.