India and AIIB Sign $ 304 Million Loan Agreement for Assam Power Transmission System | Photo credit: PTI
The Indian government and the Asian Infrastructure Investment Bank (AIIB) today signed a loan agreement for a $ 304 million Assam intrastate transmission system improvement project to improve the reliability, capacity and security of the electricity transmission network in Assam.
The total estimated cost of the project is $ 365 million, of which $ 304 million will be funded by the AIIB while the Assam state government will disburse $ 61 million. AIIB’s $ 304 million loan has a 5-year grace period and a 24-year term.
The project aims to strengthen Assam’s electricity transmission system by building 10 transmission substations and laying transmission lines with associated infrastructure; upgrading 15 existing substations, transmission lines and existing ground wire to optical power ground wire; and provide technical assistance to support project implementation.
The loan agreement was signed by Baldeo Purushartha, Assistant Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India Rajat Misra, Acting Director General, Investment Operations on behalf of AIIB.
The strong backward and forward linkages associated with the project will create socio-economic opportunities for the state’s households and business communities, Purushartha said.
Assam is currently experiencing significant energy deficits and peak demand. One of the main reasons for the energy deficit scenario in Assam is congestion in electricity distribution and transmission networks, the finance ministry said in a statement on Tuesday.
Assam Electricity Grid Corporation Limited (AEGCL), Assam’s sole public transportation utility is responsible for the operation, maintenance and development of the state’s transportation system.
AIIB Vice President DJ Pandian said AIIB’s investment will improve the reliability, capacity and security of the power transmission network in Assam. The project will also help reduce greenhouse gas emissions and improve the quality of the electricity supply to end consumers.