AfDB Approves Yen 13.9 Billion Loan to Modernize Bengaluru Electricity Distribution System

In a significant development, the Asian Development Bank (AfDB) approved a loan of $ 190 million (~ 13.9 billion yen) to upgrade the existing electricity distribution system in the city of Bengaluru in Karnataka, according to A press release.

Financial assistance will include $ 100 million (~ 7.36 billion yen) in the form of a sovereign loan and $ 90 million (~ 6.62 billion yen) in the form of a non-sovereign loan to Bangalore Electricity Supply Company Limited ( BESCOM) for its ‘Bengaluru Smart Energy Efficient Power Distribution’ project. BESCOM is one of five state-owned electricity distribution companies.

The loan is expected to assist DISCOM in its operations and maintenance (O&M) activities and financial management.

Speaking on the development, Teruhisa Oi, Senior Energy Specialist for South Asia, said: “Reliable and sustainable electricity distribution and service is an important aspect of the growth and development of the world. ‘India. We believe this project will improve the efficient distribution and delivery of electricity supply to residents of Bengaluru and support the Indian government’s strategy of building an energy-efficient distribution network.

Echoing similar sentiments, Mayank Choudhary, Senior Investment Specialist in the AfDB’s Private Sector Operations Department, said, “This feature is an innovative financing arrangement, the first of its kind to combine public and private loans to a public company. This funding structure reduces BESCOM’s sovereign exposure while helping it mobilize resources for capital spending using a market-based approach.

According to the press release, the project is expected to streamline the city’s entire electricity distribution process. The project will convert 7,200 km of overhead distribution lines into underground cables, with 2,800 km of fiber optic cabling. This move is expected to protect distribution lines from natural hazards and, in so doing, reduce business losses by 30%. Fiber cabling used for the project will be used for smart metering systems, distribution automation system (DAS) and other communication networks. The project will also install 1,700 automatic crown units with DAS to monitor the distribution line switchgear.

Founded in 1966, ADB now has 68 members, 49 of whom are from the region.

Recently, the AfDB announced that it had approved a $ 430 million (~ 31.64 billion yen) Multi-Tranche Financing Facility (CFP) to improve the reliability and quality of power supply in the Uttar Pradesh. The funding will be used for the Uttar Pradesh Electricity Distribution Grid Rehabilitation Project, which will improve the sustainability and efficiency of the state’s electricity supply.

Earlier, the AfDB announced that it had approved a loan of $ 132.8 million (~ 9.77 billion yen) to modernize the electricity distribution network of Meghalaya. The loan will be used to support a joint initiative of the Government of Meghalaya and the Government of India called “24 * 7 Power for All Meghalaya” which aims to provide continuous, reliable and affordable power to all.

Image Credit: Photo by James Wainscoat on Unsplash

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