ADB to lend $350 million for improving Madhya Pradesh power sector

NEW DELHI: The Asian Development Bank will provide USD 350 million (over Rs 2,100 crore) loan for improving power transmission and distribution system in Madhya Pradesh.

The Madhya Pradesh Power Transmission and Distribution System improvement project would carry out physical upgrades to increase capacity and deliver power more efficiently.

According to the multilateral lender, the project would build on previous ADB investments in the state's power sector totalling more than USD 1.3 billion since 2001.

"Along with ADB's loan from ordinary capital resources, the Government of India will provide USD 150 million for a total investment cost of USD 500 million.

"It will run for about four and a half years with an estimated completion date of December 2018," it said in a statement today.

The project would fund about 1,800 circuit kilometres of transmission lines and over 3,100 circuit kilometres of distribution lines. Besides, it would finance building or upgrading transmission and distribution substations.

Lead energy economist in ADB's South Asia Department Herath Gunatilake said the state has made impressive network gains in recent years but demand is outstripping supply, and the quality of electricity needs further improvements, especially in rural areas.

"Our assistance for transmission and distribution improvements will help Madhya Pradesh's efforts to provide good quality power, 24 hours a day," the statement said.