India and ADB signed Loan Agreement to Support Electricity Transmission Capacity in Assam

India and ADB (Asian Development Bank) on 27 February 2012 Signed the third and last tranche of loan agreement  to support electricity transmission and distribution capacity in Assam  under the Assam Power Sector Enhancement Investment Programme. It amounts to 120.6 million US dollars. Tranches 1 and 2 are already given.

The objective of the Assam Power Sector Enhancement Investment Programme is to meet increasing demand for electricity in the state, where the large rural population depends mainly on the agriculture and manufacturing sectors for income.

The programme will help ASEB add an additional 430 MVA substation capacity and reduce system losses by four percent. Part of the loan will be utilised to increase energy efficiency through renovation and modernization of existing 33/11 kV substations, the introduction of high voltage distribution systems, and conversion to aerial bunched cables for some high voltage and low voltage lines in the urban areas. The programme will help around 1 million households, hospitals, businesses, and schools in the state.

The loan has a 20-year term and it includes a five-year grace period with an annual interest rate decided in accordance with ADB`s LIBOR-based lending facility. The project will be completed by 30 June, 2014.