ADB, India sign Rs 730 cr loan to upgrade power distribution system in Bengaluru
Jan 04, 2021
New Delhi [India], January 4 : Asian Development Bank (ADB) and India have signed a 100 million dollar (about Rs 730 crore) loan to modernise and upgrade the power distribution system in Bengaluru.
Besides, ADB will provide a 90 million dollar (about Rs 657 crore) without sovereign guarantee loan for the project to Bangalore Electricity Supply Co Ltd (BESCOM), one of five state-owned distribution utilities in Karnataka.
The loan will strengthen the capacity of BESCOM in operation and maintenance of underground cabling, environment and social safeguards, financial management and commercial financing. Improved financial management capability will help BESCOM access domestic and international commercial financing market.
The signatories to Bengaluru smart energy-efficient power distribution project were C S Mohapatra, Additional Secretary at the Department of Economic Affairs, and Hoe Yun Jeong, Officer-in-Charge of ADB's India Resident Mission.
After signing the loan agreement on December 31, Mohapatra said conversion of overhead distribution lines into underground cables will help build an energy-efficient distribution network, reduce technical and commercial losses and minimise electricity outage resulting from natural hazards like cyclones and external disturbances to overhead lines.
Jeong said that the project demonstrates an innovative financing arrangement, the first of its kind for ADB, by combining sovereign and non-sovereign loans for a state government-owned enterprise. This is intended to significantly reduce the sovereign exposure and help BESCOM move towards a market-based approach for raising funds for capital expenditure.
In parallel to underground distribution cables, over 2,800 km of fibre optical cables will be installed to strengthen communication network. Moving about 7,200 km of distribution lines underground will help reduce technical and commercial losses by about 30 per cent.
The fibre optical cables will be used for smart metering systems, distribution automation system (DAS) in the distribution grid, and other communication networks. The project will install 1,700 automated ring main units adapted with a DAS to monitor and control the distribution line switchgears from the control centre.
