West Bengal Secures $135 million Loan To Upgrade Power Distribution Network In Rural Areas

The World Bank's Board of Directors approved a loan of USD 135 million to West Bengal to help improve the operational efficiency and reliability of electricity supply in selected areas in the state.

The state has been witnessing rapid economic development and as a result, the demand for electricity has also been growing. In fact, it has been growing at a rate of 4.5 per cent in the last five years. Meanwhile, the number of consumers served by the West Bengal State Electricity Distribution Company Limited (WBSEDCL) has went up by double over the past six years to almost 20 million consumers.

'Strain On Finances Of Discoms'

The World Bank said that the main increase has been in rural areas as the state has reached close to universal electricity access, reported Moneycontrol. The lender, however, has acknowledged how the increased demand has burdened the finances of electricity distribution companies (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, it added.

Stability is Critical

"The pandemic has adversely affected the financial health of electricity distribution companies in India and in turn the financial health of the electricity generation companies," the World Bank's Country Director in India Junaid Ahmad said.

He added that the West Bengal Electricity Distribution and Grid Modernisation project will strengthen distribution networks, invest in smart-grid technologies, and ensure the financial sustainability of WBSEDCL. It could also serve as an example for other public distribution utilities across India, he said.

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