ADB loan for strengthening Bihar’s power sector

PROJECT IS EXPECTED TO BE COMPLETED BY 31ST DECEMBER 2015

MAJOR PORTION OF THE LOAN TO FINANCE INFRASTRUCTURE

June 16, 2011, New Delhi\Patna: The Government of India and Asian Development Bank (ADB) today signed a $132 million loan agreement for strengthening Bihar’s power sector. The signatories to the loan were Shri Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India, and Shri Prodyut Dutt, Officer-in-Charge, ADB's India Resident Mission. The project agreement was signed by Shri Ganesh Prasad, Secretary and Shri Shambhu Nath Mishra, Joint Secretary on behalf of the Bihar State Electricity Board (BSEB) and the State Government respectively and Shri Prodyut Dutt of ADB.

The project is expected to be completed by 31st December 2015. It will provide/transmit additional 472,579 megawatt-hours (MWh) to consumers annually by the end of 2015 and reduce system losses by 3% by 2016 in the seven districts of Bihar.

The major portion of the ADB loan ($130.3 million) will be used to finance infrastructure such as transmission lines. The remaining ($1.9 million) will be used for strengthening the internal capacity of the Bihar State Electricity Board (BSEB). The loan will be used to install new transmission lines and to renovate and modernize transmission and distribution facilities to improve the quality and reliability of the state's electricity supply network. ADB will also provide a technical assistance grant of $300,000 for training and other capacity development to improve project and financial management in BSEB. It will assist BSEB with project implementation and construction supervision, including training in the maintenance and operation of high-voltage distribution systems (HVDS).