Bank loan

West Bengal obtains a $ 135 million loan from the World Bank to modernize its rural electricity distribution network


The International Bank for Reconstruction and Development (IBRD) approved a $ 135 million loan to West Bengal to improve operational efficiency and reliability of electricity supply in some pockets of the state.

IBRD and its concessional lending arm, the International Development Association (IDA), are also collectively referred to as the World Bank.

The variable spread or variable interest loan will have a maturity of 17 years, including a grace period of seven years and will aim to strengthen the distribution networks, invest in smart grid technologies and ensure the financial sustainability of the company. ‘State.

“The financial stability of power companies is essential to provide efficient and reliable electricity to the population. The pandemic has adversely affected the financial health of power utilities in India and in turn the financial health of power generation companies, ”said World Bank India Country Director Junaid Ahmad said in a statement issued from world headquarters.

The West Bengal Electricity Grid Modernization and Distribution Project aims to reduce the losses of the distribution network, increase the capacity of the distribution network to meet the increasing load demand, improve the overall reliability of the system, to make the grid resilient to climate disasters; and to improve the capacity of West Bengal State Electricity Distribution Company Ltd, the state-owned distribution company.

Economic growth in West Bengal has resulted in an increase in demand for electricity at a rate of 4.5% over the past five years. The number of consumers has more than doubled in the past six years to reach nearly 20 million consumers under the state-owned distribution company.

“The main increase has occurred in rural areas, as the state has achieved almost universal access to electricity. However, this growth has also put a strain on the finances of electricity distribution companies (Discoms). The COVID-19 crisis has added to this pressure. , as the demand for electricity from the commercial and industrial sectors – proportionately the biggest sources of income for Discoms – has fallen, “the World Bank said.

The project will support the implementation of the Government of India’s Power For All 24X7 program in the state and support WBSEDCL in its transition to a leading utility in India.