ADB loan to improve power distribution in India

The Asian Development Bank (ADB) Monday offered a $350 million loan to improve the power distribution system in Madhya Pradesh, Gujarat and Assam.

The Manila-headquartered ADB signed three agreements with the Indian government and the respective state governments to provide the loan which has a maturity period of up to 25 years with a grace period of five years.

The ADB will provide $200 million in loans to support the “provision of reliable, 24-hour electricity to rural households in Madhya Pradesh”, the finance ministry said in a statement.

“ADB’s loan funds will establish separate power feeders for households and agricultural use, install high-voltage distribution systems, provide new power connections and improve the financial sustainability of the distribution companies,” it said.

In a separate agreement, the ADB has offered a $100 million loan to develop a transmission system that will distribute 500 megawatts of solar power from the Charanka Solar Park in Gujarat.

The regional development bank has also offered a $50 million loan to support electricity transmission and distribution capacity in Assam.