India signs $69 m loan pact with ADB for MP Power Investment Programme
India and the Asian Development Bank (ADB) have signed a $ 69 million loan agreement which is the sixth and final tranche of the $ 620 million Madhya Pradesh Power Sector Investment Program.
This multi-tranche financing facility was approved by ADB on 29 March 2007, an official press release said.
The signatories of the sixth tranche, signed here yesterday, were Mr Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Mr. Hun Kim, ADB’s Country Director for India.
The sixth tranche will assist the Madhya Kshetra Vidyut Vitaran Company reduce power transmission and distribution losses in 117 towns. It will also support the M. P. Poorv Kshetra Vidyut Vitaran Company, the M. P. Paschim Kshetra Vidyut Vitaran Company, and the M.P. Power Trading Company set up information technology (IT)-management systems linking all parts of the distribution and trading companies in the state.
The IT management system will have a number of modules, including energy auditing, inventory tracking, and human resources and financial management, which will help the distribution companies increase efficiency. The sixth tranche will be implemented over a period of three and a half years.
The six tranches of the Madhya Pradesh Power Sector Investment Programme will increase transmission capacity in the state to about 10,000 megawatts (MW) from 5,563 MW and reduce transmission and distribution losses significantly. Enhanced power reliability, quicker repairs, along with better meterreading and billing, will also help improve the service to consumers. These measures will boost the financial performance of the state’s power sector and reduce its dependence on external support, the release said.
Mr Rajamony said the long term impact of the programme would be inclusive economic growth of the people of the state, through enhanced power supply to households through reduced transmission and distribution losses, thereby increased transmission capacity. He said that the ADB programme would improve operational efficiency in electricity distribution and financial sustainability of the distribution companies in the state.
Mr. Hun said that ADB had been a long-standing development partner for Madhya Pradesh. As of today, it has approved 14 loans amounting to $ 2.27 billion covering the power, urban, state road, and rural road sectors. ADB has also helped the state through a public resource management loan, he said.