India-ADB: $300 Million Loan signed to upgrade Power Distribution Network
The Asian Development Bank (ADB) and the Government of India have signed a $300 million loan. The loan was signed to upgrade the rural power distribution networks. It will help to provide the reliable electricity supply to the consumers in Uttar Pradesh.
- Under the agreement, a total of $430 million multi-tranche financing facility (MFF) has been approved.
- The project would lead to the conversion of 65,000 kilometers (km) of rural low-voltage distribution lines from bare conductors to aerial bundle conductors (ABC).
- It will create a robust distribution network which will benefit the estimated 70 million people in 46,000 villages.
- Under the project, the feeder separation network will be established over 17,000 km for agriculture and domestic consumers.
- This will facilitate the use of solar energy in order to meet the agriculture demand and would increase the electricity supply duration for the rural residential consumers.
Significance of the agreement
The signed loan agreement will help to upgrade the distribution network in Uttar Pradesh. It will also help in improving the quality and reliability of electricity supply. It would reduce the aggregate technical and commercial (ATC) losses. The loan amount will be used to restore the financial sustainability of the rural electricity supply in Uttar Pradesh.
Aim of the project
The project seeks to establish a separate feeder for electricity supply for the agriculture and residential consumers. It will also promote better rationing and utilization of unmetered power. It has been launched to strengthen the financial management of the power distribution entity. This would also improve the bill collection in rural areas by engaging the community. The community also involves the women’s self-help groups.