India has signed loan agreement with Asian Development Bank (ADB) for 50 Million dollars to boost power generation capacity in Assam.
The loan agreement was signed for the second Assam power sector investment programme.
- This programme aims to build up the capacity of power generation and distribution systems in state to meet the growing energy demand.
- Loan funds are going to finance investments of the programme to augment and improve generation capacity in Assam for replacement of an inefficient generating plant and construction of new hydropower plant. This programme is expected to be completed by 31 December 2018.
- Since 2003, ADB has supported Assam’s power sector with five loans totaling $450 million. These loan funds have helped the State enact key reforms and improve transmission and distribution systems.
Problems of Assam’s Power Sector
At present Assam is facing problem of power crunch. More than third of households in the State are facing daily electricity cuts for 5 to 6 hours. Many important businesses in state such as the tea gardens are not connected to the grid. In peak periods Assam has to buy up to 15% of its power from independent producers at very high cost.