The World Bank’s Board of Directors has approved a $135-million loan to West Bengal, to improve the operational efficiency and reliability of electricity supply in selected areas in the eastern state.
The $135-million loan from the International Bank for Reconstruction & Development (IBRD), a World Bank Group institution, is a variable spread loan that has a maturity of 17 years, including a grace period of seven years.
The number of consumers served by the state discom WBSEDCL has more than doubled in the past six years to almost 20 million.
Electricity demand growing
West Bengal is strategically located along the corridor to the northeast and to Southeast Asia and plays an important role in facilitating and promoting regional power trade. West Bengal is already facilitating electricity trade with Bangladesh.
Rapid economic growth in West Bengal has resulted in a growing electricity demand at a rate of 4.5 per cent in the past five years, an official release said. The number of consumers served by the West Bengal State Electricity Distribution Company Ltd (WBSEDCL) has more than doubled in the past six years to almost 20 million consumers. The main increase has been in rural areas as the state has reached close to universal electricity access. However, this growth has also put a strain on the finances of discoms. The COVID-19 crisis has added to this strain, as electricity demand from commercial and industrial sectors—proportionally the largest sources of revenue for discoms—has plummeted, the release noted.
Project objective
According to Junaid Ahmad, World Bank’s Country Director in India. “The West Bengal Electricity Distribution and Grid Modernization Project will strengthen distribution networks, invest in smart grid technologies, and ensure financial sustainability of WBSEDCL. This could serve as an example for other public distribution utilities across India.”
The project will be financed by the Government of West Bengal and loans from the Asian Infrastructure Investment Bank (AIIB) and the World Bank.
Also read: BCPL Railway Infrastructure Completes Electrification Project In West Bengal
In May 2020, the super cyclone, Amphan, caused significant damage to the electricity infrastructure in West Bengal. Support through the West Bengal Electricity Distribution and Grid Modernization Project aims to strengthen WBSEDCL’s information and communications systems and provide immediate response to similar crises and emergencies.
The project aims to reduce distribution system losses, increase the capacity of the distribution network to meet the growing load demand, improve the overall reliability of the system, make the network resilient to climate disasters, and improve the institutional capacity of WBSEDCL.
Featured photograph (source: betterindia.com) is for representation only
