GUWAHATI, Feb 21 � The Asian Development Bank (ADB) and the Central government yesterday signed a $50-million loan agreement in New Delhi for the second Assam Power Sector Investment Programme, which aims to build up the capacity of power generation and distribution systems to meet the growing energy demand in the State, said an official statement.
The first tranche loan of the $300-million multi-tranche financing facility will fund generation capacity enhancement and distribution efficiency improvement sub-projects in the State.
Tarun Bajaj, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, who signed the agreement on behalf of the Government of India, said that more than a third of households in Assam face daily electricity cuts of 5-6 hours, many important businesses, such as the tea gardens, still are not connected to the grid, and in peak periods the State has to buy up to 15 per cent of its power from independent producers at a very high price.
He added that the project will finance investments to augment and improve generation capacity through replacement of an inefficient generating plant and construction of a new hydropower plant.
Teresa Kho, Country Director of ADB�s India Resident Mission, who signed the loan agreement for the ADB, said the ADB has supported Assam�s power sector since 2003 with five loans totaling $450 million.