New Delhi (NVI): India today signed a loan agreement of USD 304 million project with Asian Infrastructure Investment Bank (AIIB) to improve reliability, capacity and security of the power transmission network in Assam.
The project Assam Intra-State Transmission System Enhancement Project aims to strengthen electricity transmission system across the northeastern state.
This will be done with construction of 10 transmission substations and laying transmission lines with the associated infrastructure, upgrading 15 existing substations, transmission lines and existing ground wire to optical power ground wire, and providing technical assistance to support project implementation..
The programme would strengthen the existing intrastate transmission network of Assam by augmenting it with newer networks to achieve affordable, secure, efficient and reliable 24×7 power, the Ministry Of Finance said in a statement.
“This would, in turn, bring Assam closer to ensuring long-term sustainability of its electricity supply,” it added.
The ministry also informed that the total estimated cost of the project is USD 365 million, of which USD 304 million will be financed by the AIIB while the counterpart funding from the government of Assam is USD 61 million. The loan from the AIIB has a 5-year grace period and a maturity of 24 years.
The agreement was signed by Baldeo Purushartha, Joint Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Rajat Misra, Acting Director General, Investment Operations on behalf of the AIIB.
After the signing the agreement, Purushartha said that the project is expected to improve the transmission network and reduce transmission losses. The strong backward and forward linkages associated with the project will create socio-economic opportunities for both households and business communities in the State.
“This project financing will help achieving the AIIB energy sector mandate and also support Government of India in fulfilling the national development priorities,” Purushartha added.
The state is currently witnesses substantial energy and peak demand deficits. One of the main reasons for the power-deficit scenario in the state is congestion of the electricity distribution and transmission networks, the ministry noted.
“Assam Electricity Grid Corporation Limited (AEGCL), the sole transmission utility in Assam is responsible for the operation, maintenance and development of the transmission system in the state,” it said.
AEGCL currently operates 66 substations with 6,882 megavolt-ampere capacity, and its transmission network comprises 5,701 circuit kilometers of transmission lines. However, the project would improve the transmission network constraints and congestion in the state.
DJ Pandian, vice-president, AIIB said that the AIIB’s investment will improve the reliability, capacity and security of the power transmission network in Assam.
“The project will also help in reducing greenhouse gas emissions and improve the quality of power supply to the ultimate consumers, Pandian added.