ADB, Govt of India Sign $48m Loan Agreement

The Asian Development Bank (ADB) and the Government of India signed Tuesday a $48 million loan to help Assam state continue its drive to improve access to efficient and reliable power.

    This is the second tranche loan of the US$300 million multi tranche-financing facility for the Assam Power Sector Investment Program that was approved by the ADB Board in July 2014, according to ADB press release.

    The project will help Assam to enhance the capacity and efficiency of its power distribution system to improve electricity services for end users. The first tranche loan of $50 million was signed in February 2015.

    The project, which is expected to be completed by December 2019, will help APDCL add substation capacity, expand and improve the medium-voltage network, reduce system losses by 3%, and enhance energy efficiency through the renovation and modernization of existing 33/11 kV substations.

    Part of the loan will be used to strengthen the institutional capacity of APDCL through setting up independent meter testing laboratories and load dispatch centers and installing a centralized uniform billing system for 1.2 million customers.

    The loan of US$48 million from ADB’s ordinary capital resources makes up 80% of the total project cost of almost $60 million, with the Government of Assam providing counterpart finance of $12 million.

    The loan has a 25-year term, including a five-year grace period with an annual interest rate determined in accordance with ADB's LIBOR-based lending facility.