World Bank Offers $310 Million Loan to Reform Jharkhand’s Power Transmission System

Project to finance 350,000 smart meters in Ranchi


Helping another Indian state in turning around the face of its energy infrastructure, the World Bank has now come forward with a $310 million loan assistance for Jharkhand.

The agreement, signed between the World Bank, Jharkhand state government. and the government of India, will help provide reliable, quality, and affordable 24×7 electricity to the citizens of Jharkhand.

The loan has been sanctioned for the state under Jharkhand Power System Improvement Project. The project is part of the central government’s Power for All program launched in 2014. Recently, the World Bank also approved a $250 million development policy loan (DPL) to Rajasthan for the improvement of the state’s electricity distribution sector under the Power for All program.

The $310 million loan for Jharkhand, which will come from the World Bank group’s International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a final maturity of 25 years.

The loan assistance will help build new power transmission infrastructure, while introducing systems to improve the technical efficiency and commercial performance of the state power utilities. The World Bank project will also 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.

The project will also support smart meters, to be 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.

Though a significant portion of the proposed investments is aimed at improving power transmission infrastructure, the bank’s assistance will also focus on developing institutional capacities of state’s  transmission and distribution companies (DISCOMs) and improving their operational performance, which is badly needed.

In July 2018, the Ministry of Power (MoP) released its sixth annual integrated ratings for the state distribution utilities, in which Jharkhand utilities were among the eight worst performing ones.

SAUBHAGYA data shows that 10,427,191 households are yet to be electrified in the country. States like Tamil Nadu, Kerala, Andhra Pradesh, Goa, Gujarat, and Punjab have already achieved 100 percent household electrification. Jharkhand still has 565,635 households which are yet to be electrified.