New Delhi: The centre has signed an agreement for borrowing $304 million (over Rs 2,200 crore) with Asian Infrastructure Investment Bank (AIIB). The agreement signed on Tuesday aims at improving the power transmission network in Assam. "The fund will be utilised for the ''Assam Intra-State Transmission System Enhancement Project'', aiming to improve reliability, capacity and security of the power transmission network in the state" an official statement released by the Ministry of Finance.
The total estimated cost of the project is $365 million, of which $304 million will be financed by the AIIB and the rest by the state government, it said. "The loan from the AIIB has a five-year grace period and a maturity of 24 years," the release said.
The project aims to strengthen Assam''s electricity transmission system by constructing 10 transmission substations, laying transmission lines, upgrading 15 existing substations, transmission lines and the existing ground wire to optical power ground wire. "The programme will strengthen the existing intrastate transmission network of Assam by augmenting it with newer networks to achieve affordable, secure, efficient and reliable 247 power. This will, in turn, bring the state closer to ensuring the long-term sustainability of its electricity supply," it added.
The northeastern state is currently witnessing an energy deficit, especially in peak hours, and one of the main reasons for this is the congestion of electricity distribution and transmission networks.
ALSO READ: After shelving share buyback plan, Coal India to consider second interim dividend for FY21
The Assam Electricity Grid Corporation Ltd (AEGCL), the sole transmission utility in Assam, is responsible for the operation, maintenance and development of the transmission system in the state. AEGCL currently operates 66 substations with 6,882 megavolt-ampere capacity and its transmission network comprises 5,701 circuit kilometres of transmission lines.
The AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia. It began operations in January 2016.
(PSU Watch- India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)