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A $240 million loan agreement to support the Andhra Pradesh Government's 24x7 power for all scheme was inked by the Governments of India and Andhra Pradesh and the World Bank.
The Asian Infrastructure Investment Bank (AIIB) also signed a $140 million loan agreement for this project, which is first such in India being co-financed by the AIIB.
The World Bank and AIIB will provide loans in a 60:40 ratio for all components of the project.
The loan agreement was signed by Raj Kumar, Joint Secretary, Department of Economic Affairs, K Ranganatham, Advisor, Department of Energy, Government of Andhra Pradesh, D J Pandian, Vice President and Chief Investment Officer, AIIB, and Hisham Abdo Kahin, Operations Manager and Acting Country Director,World Bank India.
“The project is part of the Government of India’s Power for All programme launched in 2014. Andhra Pradesh is among a few states selected for the roll-out. The energy demand in the state is expected to grow and substantial investments will be needed to meet this rising demand,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance.
This project is expected to improve operational efficiency in the transmission and distribution sector.
While a significant portion of the proposed investments are aimed at improving power supply to rural areas, the project will also focus on demonstrating the deployment of smart grids in selected towns.
“By increasing the supply of reliable electricity to households, industries, businesses and various other productive sectors, the project will contribute to economic development, poverty alleviation, and inclusive growth in Andhra Pradesh,” said Hisham Abdo Kahin, Operations Manager and Acting Bank Country Director, World Bank, India.
The project will also support smart consumer meters, with two-way communication and backend IT infrastructure, deployed in select urban towns.
The $240 million loan has a 5-year grace period, and a maturity of 19 years.
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