West Bengal secures $135m loan from World Bank to upgrade rural power distribution network

The International Bank for Reconstruction and Development (IBRD) has approved a $135 million loan to West Bengal to improve operational efficiency and reliability of electricity supply in some pockets of the state.

IBRD and its concessional lending arm, the International Development Association (IDA), are also collectively referred to as the World Bank.

The variable spread loan or floating interest loan will have a maturity of 17 years, including a seven-year grace period and will aim to strengthen distribution networks, invest in smart-grid technologies and ensure the financial sustainability of public discom.

“The financial stability of power companies is essential to providing efficient and reliable electricity to people. The pandemic has adversely affected the financial health of power distribution companies in India and therefore the financial health of power generation companies,” World Bank India Country Director Junaid Ahmad said. in a statement issued by the world headquarters.

The West Bengal Power Distribution and Grid Modernization Project aims to reduce distribution system losses, increase the capacity of the distribution grid to meet increasing load demand, improve overall system reliability, to make the network resilient to climatic disasters and to improve the institutional framework. capacity of West Bengal State Electricity Distribution Company Ltd, the public distribution company.

Economic growth in West Bengal has led to an increase in electricity demand at a rate of 4.5% over the past five years. The number of consumers has more than doubled over the past six years to almost 20 million consumers under the public distribution company.

“The main increase has been in rural areas as the state is close to universal access to electricity. However, this growth has also strained the finances of the electricity distribution companies (Discoms) “The COVID-19 crisis has added to this pressure, as demand for electricity from the commercial and industrial sectors – proportionally the main sources of revenue for Discoms – has fallen,” the World Bank said.

The project will support the implementation of the Government of India’s Power For All 24X7 program in the state and support WBSEDCL in transitioning to a leading utility in India.

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