Money & Banking

ADB approves $190 million loan to upgrade power distribution in Bengaluru

Our Bureau New Delhi | Updated on December 04, 2020 Published on December 04, 2020

It has approved a combined sovereign and non-sovereign loan on a pilot basis for the first time

The Asian Development Bank (ADB) has approved a combined sovereign and non-sovereign loan of $190 million to modernise and upgrade the power distribution system in Bengaluru.

Though ADB has supported several power distribution projects in India since 2010, this combination of sovereign and non-sovereign loans is being deployed on a pilot basis for the first time.

“The ADB assistance for the Bengaluru Smart Energy Efficient Power Distribution Project includes $100 million sovereign loans and $90 million without sovereign guarantee loan to Bangalore Electricity Supply Company Limited (BESCOM), one of five state-owned distribution utilities and the largest in the State,” an ADB statement said.

According to Mayank Choudhary, Principal Investment Specialist at ADB’s Private Sector Operations Department, “This feature is an innovative financing arrangement, the first of its kind for ADB, combining public and private sector loans to a state government-owned enterprise. This financing structure reduces BESCOM’s sovereign exposure while helping it raise resources for capital expenditure using a market-based approach.”

“The project will convert 7,200 kilometer (km) of overhead distribution lines to underground cables with the parallel installation of 2,800 km of fiber-optic communication cables. Moving the distribution lines underground protects them from natural disasters and interference, reducing technical and commercial losses by about 30 per cent,” the statement said.

The fiber-optic cables will be used for smart metering systems, distribution automation system (DAS) in the distribution grid, and other communication networks. The project will install 1,700 automated ring main units adapted with a DAS to monitor and control the distribution line switch gears from the control center, the statement added.

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Published on December 04, 2020