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ADB Approves USD 132.8 Million Loan to Modernize Power Distribution Network in Meghalaya

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ADB-approves-USD-132On November 3, 2020 The Asian Development Bank (ADB) approved a USD 132.8 million loan to Modernize Power Distribution Network in Meghalaya.

Objective– To improve power quality and upgrade the power distribution network in Meghalaya.

Points to be Noted:

i.The loan will be increased by a USD 2 million grant from the Japan Fund for Poverty Reduction of ADB.

ii.This loan will finance mini grids that improve power quality and support income generation, particularly for women and other socially disadvantaged groups, using renewable energy sources in 3 villages and 3 schools.

About the Project:

i.The project helps the Meghalaya Power Distribution Corporation Limited (MePDCL) to develop a distribution sector road map and a financial road map.

  • These road maps strengthen the MePDCL’s  capacity to operate and manage the distribution networks.

ii.It supports Meghalaya’s  ‘24X7 Power for All Meghalaya’ to provide quality electricity 24 hours, 7 days a week to households, industries, businesses, and the public.

iii.It will construct 23 substations, 45 substations will be renovated and modernized including the provision of control room equipment and protection systems.

iv.It will install 2,214 kilometers of distribution lines and associated facilities that covers 3 out of 6 circles in the state.

v.It will replace antiquated electromechanical meters with smart meters that benefit about 180,000 households.

Benefits

i.The project will improve the distribution system and the financial sustainability of the distribution business in Meghalaya, by modernizing and improving the distribution network.

ii.When the access to electricity is improved and the new economic opportunities in rural areas are created, will help to address poverty, promote rural development, and reduce inequality.

Key Info:

i.Meghalaya has achieved 100% electrification, but its per capita electricity consumption of 832 kilowatt-hours (kWh) is low when compared to the national average of 1,122 kWh in 2017.

ii.The remote rural areas of the state suffer from frequent power interruptions.

iii.In 2015, the Government of India and the state government of Meghalaya embarked on a joint initiative called ‘24X7 Power for All Meghalaya’ to provide uninterrupted, quality, reliable, and affordable power supply to all electricity consumers.

Additional Info:

Meghalaya Cabinet approved a proposal from MeECL

i.In August 2020, the Meghalaya cabinet approved a proposal from the

Meghalaya Energy Corporation Limited (MeECL) to avail a Rs 1,345.72 crore loan.

ii.The loan is to clear off the outstanding dues, with the condition that it has to reduce the Aggregate Technical and Commercial (AT&C) losses and reduce the gap of Average Cost of Supply (ACS) and Average Revenue Realized (ARR).

  • MePDCL has huge outstanding against the power purchased from central power generating stations and to the Power Grid Corporation of India Limited (PGCIL).

Indian Govt announced Atma Nirbhar Bharat Abhiyaan

i.Indian Government has announced the Aatma Nirbhar Bharat Abhiyaan (ANBA) scheme to provide liquidity to stress discom (distribution companies) in the form of loans supported by a state government guarantee.

ii.This will be given to clear the liabilities of the gencos (generation companies) and transcos (transmission companies) by the state discom.

iii.Under this scheme, the Rural Electrification Corporation (REC) and the Power Finance Corporation will extend special long term transition loans up to 10 years to the discom on certain conditions.

Recent Related News:

i.The Asian Development Bank (ADB) has approved a USD 1 billion (about Rs 7,485 crore) loan to construct the modern, high-speed 82-kilometer Delhi – Meerut, Uttar Pradesh Regional Rapid Transit System (RRTS) in India, a first of its kind in India. The finance of the Delhi- Meerut RRTS project will be given in 4 tranches between August 2020 and May 2025. The NCR Transport Corporation (NCRTC) will execute the project.

ii.On April 29, 2020, Asian Development Bank (ADB), is a regional development bank, has approved a loan worth of $346 million (around Rs 2,616 crore) for the government of Maharashtra to provide reliable power connection in rural areas of the state, where the labour force is mostly engaged in agriculture and related activities.

About Asian Development Bank (ADB):
Headquarters– Mandaluyong, Philippines
President– Masatsugu Asakawa
Membership– 68 countries(Including India)
Formed- 1966