The Government of India today signed a loan agreement with the Asian Development Bank (ADB) for $89.7 million for the Assam Power Sector Enhancement Programme, Tranche- II, within the overall Facility of $200 million. This tranche will assist to build two 220/132 kV and six 132/33 kV new substations, construct 342 km of transmission lines (185 km of 220 kV and 157 km of 132 kV transmission lines) and augment 11 existing substations. It is the second ADB project in support of Assam's Power Sector Development Program that is planning to build 14 new substations, construct over 600 km of transmission lines, extend & augment two transmission substations, augment 18 existing other substations, and upgrade approximately 715 km of ground wire to fiber optic cable. 

The project aims to increase the active power carrying capacity of the network from 766 MW to 1,883 MW by 2014, reduce substation transformation capacity loading to 80% from the current 95%, and reduce the system loss from 35% (6% transmission) in 2008 to 19% (4% transmission) in 2014. 

Shri Venu Rajamony, Joint Secretary (MI), Department of Economic Affairs, Ministry of Finance, signed the loan agreement on behalf of the Government of India (GOI). JS (MI) said on the occasion, "We look forward to implementation of this investment programme, which will strengthen power transmission capacity in the state and improve access to distribution through grid electricity. I am happy to note the two unique features of this project of private sector participation and the additional off-grid renewable component. The franchisee system for distribution and the emphasis on renewable energy within the scope of this project is welcome." 

"By helping enhance quality and expanded service delivery of electricity in Assam through improved technical, commercial, and financial performance and capability of the power sector utilities, the project will create a sustainable state power sector to support inclusive economic growth," said Mr. Naoki Sakai, Senior Energy Specialist in ADB's South Asia Department. 

The Assam State Electricity Board is the executing agency and the Assam Electricity Grid Corporation Limited is the implementing agency for the project. The project is expected to be completed by 31 May 2013.  Loan agreement expands Assam power transmission capacity and mandates private participation and renewable off-grid components. A loan agreement finances the Assam Power Sector Enhancement Programme, Tranche II to construct and augment substations and 220 kV/132 kV transmission lines, upgrade ground wire to fiber optic cable, and meet targets to increase network capacity while reducing substation loading and system losses. The Assam State Electricity Board is the executing agency and the Assam Electricity Grid Corporation Limited the implementing agency, with project completion scheduled and policy features including private sector distribution participation via a franchisee system and an off-grid renewable component.