ADB Grants $132.8 Mn Loan to Modernise Power Distribution Network in Meghalaya

Network Planning Group under PM Gati Shakti Gives Nod to Infra Project on Renewable Energy

ADB has approved a USD 132.8 million loan to improve power quality and upgrade the power distribution network in Meghalaya.

The Asian Development Bank (ADB) has approved a USD 132.8 million loan to improve power quality and upgrade the power distribution network in India’s northeastern state of Meghalaya.

The project will construct 23 substations; renovate and modernize 45 substations, including the provision of control room equipment and protection systems; install and upgrade 2,214 kilometers of distribution lines and associated facilities covering three out of the six circles in the state. It will replace antiquated electromechanical meters with smart meters, which will benefit about 180,000 households.

Although Meghalaya has achieved 100 percent electrification, the state’s per capita electricity consumption of 832 kilowatt-hours (kWh) is low compared to the national average of 1,122 kWh in 2017, and remote rural areas in the state suffer from frequent power interruptions. Distribution networks are overloaded and substations in rural areas use outdated technology, resulting in high aggregate technical and commercial (AT&C) losses. The Government of India and the state government of Meghalaya embarked on a joint initiative in 2015 called 24X7 Power for All Meghalaya to provide uninterrupted, quality, reliable, and affordable power supply to all electricity consumers and this investment will work under the same objective and initiative.

“This project fully supports Meghalaya’s Power for All initiative in providing quality electricity 24 hours, 7 days a week to households, industries, businesses, and the public. By modernising and improving the distribution network, the project will improve the operational efficiency of the distribution system and the financial sustainability of distribution business in the state,” said ADB Senior Energy Specialist for South Asia Jaimes Kolantharaj. “Improving access to electricity and creating economic opportunities in rural areas will help address poverty, promote rural development, and reduce inequality.”

The project will help develop a distribution sector road map and a financial road map for the Meghalaya Power Distribution Corporation Limited (MePDCL). These road maps will strengthen the capacity of MePDCL to operate and manage the distribution networks.

Furthermore, the loan will be supplemented by a USD 2 million grant from ADB’s Japan Fund for Poverty Reduction that will finance mini-grids that will improve power quality and support income generation, especially for women and other socially disadvantaged groups, using renewable energy sources in three villages and three schools.