ADB $350 Million Loan to Improve Power Distribution in India

The Manila-headquartered Asian Development Bank (ADB) has offered a $350 million loan to improve the power distribution system in Indian states of Madhya Pradesh, Gujarat and Assam on Monday, Feb. 27, 2012.

ADB signed three agreements with the Indian government and the respective state governments to provide the loan which has a maturity period of up to 25 years with a grace period of five years.

The ADB will provide $200 million in loans to support the "provision of reliable, 24-hour electricity to rural households in Madhya Pradesh," the finance ministry said in a statement.

"ADB's loan funds will establish separate power feeders for households and agricultural use, install high-voltage distribution systems, provide new power connections and improve the financial sustainability of the distribution companies," it said.

In a separate agreement, the ADB has offered a $100 million loan to develop a transmission system that will distribute 500 megawatts of solar power from the Charanka Solar Park in Gujarat.

The regional development bank has also offered a $50 million loan to support electricity transmission and distribution capacity in Assam.