ADB to assist GoI to strengthen and modernise power distribution in rural parts of UP

With an aim to provide reliable electricity to consumers in Uttar Pradesh, the multilateral-funding agency, Asian Development Bank (ADB) and the Government of India signed a $300 million loan to upgrade rural power distribution networks.

December 19, 2020

Asian Development Bank to loan the government of India US$ 300 mn towards upgrading distribution networks in Uttar Pradesh.

Similar loan of US$ 132.8 mn has been provided to Meghalaya to strengthen and modernise its distribution networks.

This overall loan of US$ 430 mn aims to benefit around 70 million people spread over 46,000 villages in the country.

ADB was established in 1966 and has a total of 68 members with 49 of them hailing from the Asia-Pacific region.

To ensure sustainable and reliable power distribution in rural areas of Uttar Pradesh, the government of India and Asian Development Bank inked a loan agreement of US$ 300 million, with Dr C. S. Mohapatra, Additional Secretary, Department of Economic Affairs in the Ministry of Finance, and Mr. Takeo Konishi, Country Director of ADB’s India Resident Mission as signatories. This loan would be used to upgrade the distribution networks to improve the quality and reliability of electricity supply, reduce the aggregate technical and commercial (ATC) losses and restore the financial sustainability of the rural electricity supply in UP. In a similar move, ADB also approved a US$ 132.8 million loan to strengthen and modernise the distribution network in Meghalaya to improve the quality of power supply to households, industries, and businesses alike.

This overall loan of US$ 430 million multi-tranche financing facility (MFF) has been provided keeping in mind the conversion of 65,000 km of rural low-voltage distribution lines into a robust distribution network. This aims to benefit approximately 70 million people in 46,000 villages. For agriculture and domestic consumers, a feeder separation network will be established over 17,000 km to expedite the use of solar energy. It will also improve the gender inclusivity, corporate governance, and financial management capacity of Uttar Pradesh Power Corporation Limited (UPPCL). To encourage the women of these rural areas through self-help women’s groups, the project will engage them as community collection agents, thereby improving bill collection along with increasing the family income of these women. 

Supporting the Government of India’s vision of “Power for All”, this project aims to provide a sustainable and inclusive power supply to one of India’s largest state thereby contributing to a vital aspect of the country’s growth and development, namely reliable and sustainable power distribution and service across the nation. The Asian Development Bank, established in 1966, has devoted itself with its 68 members (49 from the region) to achieve this vision of a prosperous, inclusive, resilient, and sustainable Asia-Pacific along with its incessant efforts to eradicate poverty.