Government of India and the World Bank sign $310 million Loan Agreement for Jharkhand Power System Improvement Project to provide reliable, quality, and affordable 24x7 electricity to the citizens of Jharkhand

The Government of India, the Government of Jharkhand and the World Bank signed here today in New Delhi a $310 million Loan Agreement for Jharkhand Power System Improvement Project to provide reliable, quality, and affordable 24x7 electricity to the citizens of Jharkhand.

The Jharkhand Power System Improvement Project will help build new power transmission infrastructure, as well as put in place systems to improve the technical efficiency and commercial performance of the state power sector utilities. The Project will help bring in modern technology solutions such as automated sub-stations, and network analysis and planning tools to provide reliable power supply and enhance customer satisfaction.

While a significant portion of the proposed investments are aimed at improving power transmission infrastructure, the Project will also focus on developing institutional capacities of State-owned power transmission and distribution companies and improving their operational performance.

The Project is part of the Government of India’s Power for All program launched in 2014. The plan envisages addition of over 4.5 GW generation capacities by 2022 (including a significant share of 1.5 GW from solar energy), through a mix of Private and Public-sector investments.

The Agreement for the Project was signed by Mr. Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; Ms. Vandana Dadel, Secretary, Energy Department, on behalf of the Government of Jharkhand; and Mr. Junaid Ahmad, Country Director, World Bank India, on behalf of the World Bank.

After signing the Agreement, Shri Sameer Kumar Khare ,Additional Secretary, DEA said that Jharkhand was one of the first States’ to join the Power for All plan and is making efforts to improve access to power through reforms in transmission and electricity distribution. He further said that with the demand for reliable power expected to almost double in the coming years, the Project will help meet the energy needs of the State for its economic growth.

Speaking on the occasion, Mr. Junaid Ahmad, World Bank Country Director in India said that the Government of Jharkhand is committed to providing quality power supply to its people for the State’s economic development. This Project will help the State increase supply of reliable electricity to households, industries, businesses and various other productive sectors, and contribute to poverty alleviation, and inclusive growth in Jharkhand.

The Government of Jharkhand has achieved significant results towards electrification. As per data from the Jharkhand Distribution Company more than 80 percent of all citizens in the State have access to electricity. However, the State will have to continue to work towards providing reliable 24x7 power for all its consumers. The Per Capita Consumption of electricity in Jharkhand at 552 kWh at the end of FY16 is roughly half of the national average. Improved availability of power in the region from plants owned by the Central Government and Independent Power Producers (IPPs) has helped the State achieve lower demand supply deficits in recent years.

Some of the major components of the project include construction of new substations and transmission lines, primarily at 132kV voltage level; provide support to the Jharkhand Urja Sancharan Nigam Limited (JUSNL) in setting-up systems for strengthening the State Load Dispatch Centre (SLDC) operations including financing software solutions for improving scheduling and dispatch functions. This will help integrate renewable energy in the State grid.

The Project will also support smart meters, with two-way communication and backend IT infrastructure, deployed in select urban towns. These meters will not only reduce technical and commercial losses, but also improve peak load management. The meters are expected to provide consumers with better access to data which will encourage them to reduce their electricity consumption. To begin with, the Project will finance smart metering for around 350,000 consumers in the capital city of Ranchi. 

“Implementing such a large program and improving the financial health of the sector, requires deeper institutional development of its power transmission & distribution utilities. Hence, one of the key elements of the current project will be to support institutional strengthening of the State-owned utilities in the areas of procurement, contract implementation, financial management, and commercial operations among others,” said Mr. Amol Gupta, Energy Specialist and Ms. Kavita Saraswat, Senior Power Engineer and World Bank’s Task Team Leaders for this project.

The $310 Million Loan from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a final maturity of 25 years.