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GoI & AIIB sign agreement for $304mn for Assam Intra-State Transmission System Enhancement Project

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network in the state of AssamOn February 24, 2021, the Government of India (GoI) and the Asian Infrastructure Investment Bank (AIIB) signed a loan agreement of $304 million (mn) for Assam Intra-State Transmission System Enhancement Project to strengthen the quality, capacity and security of the 24*7 power supply in Assam along with reducing greenhouse gas emissions.

  • The agreement was signed by Baldeo Purushartha, Joint Secretary, Department of Economic Affairs, Ministry of Finance on behalf of GoI and Rajat Misra, Acting Director General, Investment Operations on behalf of the AIIB.

Terms of Agreement:

Total estimated cost of Project- $365mn

AIIB Funding (Loan)- $304mn

Assam Funding- $61mn

Loan Maturity- 24 years

Grace Period- 5 years

How will Assam’s electricity transmission be strengthened under this agreement?

–By constructing 10 transmission substations and laying transmission lines with the associated infrastructure.

–By upgrading 15 existing substations, transmission lines and existing ground wire to optical power ground wire.

–By providing technical assistance to support project implementation.

Need for this Project:

There is power deficit scenario in Assam due to congestion of the electricity distribution and transmission networks. Assam Electricity Grid Corporation Limited (AEGCL) is the sole transmission utility in Assam is responsible for the operation, maintenance and development of the transmission system in the State.

  • It currently operates 66 substations with 6,882 megavolt-ampere capacity comprising 5,701 circuit kilometers of transmission lines.

Recent Related News:

i.Cabinet Committee on Economic Affairs (CCEA) chaired by PM Narendra Modi approved the revised cost estimate of the North Eastern Region Power System Improvement Project (NERPSIP) for six states at an estimated cost of Rs 6,700 crore. The 6 states are Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

ii.On December 30, 2020, Asian Development Bank (ADB) & Government of India (GoI) signed a USD 231 Million (~INR 1688.5 Crores) Loan Agreement for the Assam Power Sector Investment Program (APSIP) for the construction of Lower Kopili Hydroelectric Power (LKHEP) plant.

About Assam:
Tiger Reserve– Manas Tiger Reserve, Nameri Tiger Reserve, Kaziranga Tiger Reserve
Ramsar site– Deepor Beel

About Asian Infrastructure Investment Bank (AIIB)
India, which was among the AIIB’s 57 founding members in 2016. It is also the second-largest shareholder (with 7.62% voting shares) after China (26.06%) and  the largest recipient of AIIB’s funds.
Established in – 2016
Headquarters – Beijing, China
Member Countries– 103
President – Jin Liqun (China)