AGENCIES
GUWAHATI, JULY 4
[dropcap]T[/dropcap]he Asian Development Bank (ADB) has approved a $300 million loan for Assam to help it tackle acute power crisis. The loan is aimed at cutting load-shedding and will benefit over 2.7 million people in the state, according to the ADB.
The funds will be disbursed in three tranches and the project is expected to be completed by the end of 2023. The first installment of $50 million will be used to replace the ageing gas turbines in the Lakwa Gas Power Plant in upper Assam. The second installment is of $50 million and the third of $200 million.
A statement from the Manila-based ADB said this loan would help “continue Assam’s drive to eliminate power sector inefficiencies that are hurting its consumers, its world-famous tea industry and its environment.”“More than a third of the state’s households face daily power cuts of 5-6 hours. Many important businesses, such as the tea gardens, still aren’t connected to the grid. In the peak periods, Assam has to buy up to 15% of its power from independent producers at a high cost,” the ADB statement said, quoting the lead energy specialist with ADB’s South Asia department, Herath Gunatilake. It added, “By funding measures to cut load-shedding, the loan is expected to benefit over 2.7 million consumers.”
The multi-tranche loan facility, which is part of a broader 10-year, $3.5-billion, state investment programme, will fund generation and distribution upgrades, including the construction of a 120-MW hydropower plant. It will also finance new energy-efficient generating equipment in the existing plants, new distribution lines and substations and financial management training and support for staff of the state power company Assam Power Generation Corporation and Assam Power Distribution Company, the ADB statement said.
“The project will bolster Assam Power Distribution Company’s finances by allowing it to lower purchases of expensive electricity from independent power producers. Meanwhile, the planned Lower Kopili run-of-the-river hydropower plant in central Assam will help the state avoid over 530,000 tons per annum of carbon dioxide emissions that would otherwise be produced by fossil fuel-driven generation,” the statement added.
According to ADB, it has supported the state’s power sector since 2003, with five loans totaling $450 million. These have helped the state enact key reforms and improve transmission and distribution systems. “The new loan will continue to build up the capacity of power companies and regulatory agencies, and to further cut distribution losses, which have decreased from 40% in the fiscal year 2001-02 to 24% in financial year 2012-13.
