The Government of India and Asian Development Bank (ADB) signed a $132 million loan agreement on 15 June 2011, for strengthening Bihar’s power sector. The signatories to the loan were Shri Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India, and Shri Prodyut Dutt, Officer-in-Charge, ADB's India Resident Mission. The project agreement was signed by Shri Ganesh Prasad, Secretary and Shri Shambhu Nath Mishra, Joint Secretary on behalf of the Bihar State Electricity Board (BSEB) and the State Government respectively and Shri Prodyut Dutt of ADB.
The project is expected to be completed by 31 December 2015. There is a provision for providing/transmitting additional 472,579 megawatt-hours (MWh) to consumers annually by the end of 2015 and reduce system losses by 3% by 2016 in seven districts of Bihar.
Areas in which the loan to be used
• The major portion of the ADB loan ($130.3 million) planned to be used to finance infrastructure such as transmission lines.
• The remaining ($1.9 million) is planned be used for strengthening the internal capacity of the Bihar State Electricity Board (BSEB).
• The loan is also planned to be used to install new transmission lines and to renovate and modernize transmission and distribution facilities to improve the quality and reliability of the state's electricity supply network.
• ADB assured to provide a technical assistance grant of $300,000 for training and other capacity development to improve project and financial management in BSEB.
• ADB also assured to assist BSEB with project implementation and construction supervision, including training in the maintenance and operation of high-voltage distribution systems (HVDS).
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