Centre signs loan agreement with AIIB to improve power transmission network in Assam



The Union Government and the Asian Infrastructure Investment Bank (AIIB) on February 23, signed a loan agreement to improve the power transmission network in Assam.

“The programme would strengthen the existing intra-state transmission network of Assam by augmenting it with newer networks to achieve affordable, secure, efficient and reliable round-the-clock power. This would bring Assam closer to ensuring the long-term sustainability of its electricity supply,” an official statement issued on Tuesday read.

Reportedly, the loan agreement was signed by the Joint secretary in charge of the Department of Economic Affairs, Ministry of Finance, Baldeo Purushartha, on behalf of the Government of India, and the Acting Director General, Investment Operations Rajat Misra, on behalf of AIIB.

The $304 million loan was signed under Assam Intra-State Transmission System Enhancement Project.

The project is said to enhance Assam’s electricity transmission system by constructing 10 transmission substations, laying transmission lines, and upgrading 15 existing substations.

The existing ground wire will also be converted to optical power ground wire, with technical support for its implementation.

Notably, Assam is currently witnessing substantial energy and peak demand deficits due to congestion of the electricity distribution and transmission networks. 

The Assam Electricity Grid Corporation Limited (AEGCL) currently operates 66 substations with 6,882 megavolt-ampere capacity, and its transmission network comprises 5,701 circuit kilometres of transmission lines.  

The total estimated cost of the project is $365 million, of which $304 million will be financed by the AIIB, while the counterpart funding from the Government of Assam is $61 million.

“The $304 million loan from the AIIB has a five-year grace period and maturity of 24 years,” the statement added.

(Edited by Gabriel G Momin & Christopher Gatphoh)