This is the third tranche loan for the ongoing Assam Power Sector Investment Programme that was approved in 2014

The Asian Development Bank (ADB) and the Indian government have signed an agreement for a USD 231 million loan to increase the electricity generation capacity in Assam.

According to the agreement, signed on Wednesday, this will be achieved through the construction of a 120 megawatts (MW) hydroelectric power plant that will enhance availability of electricity for households.

This is the third tranche loan for the ongoing Assam Power Sector Investment Programme that was approved by the ADB Board in July 2014, an official statement issued by the Ministry of Finance said. The programme, including its two previous tranches, focuses on enhancing capacity and efficiency of the energy generation and distribution systems in Assam to improve electricity service to end users.

According to the statement, the proposed hydroelectric project is a run-of-the-river project over Kopili river. This will help increase electricity supplied from clean energy by 469 gigawatt hour (GWh) by 2025; it will also reduce greenhouse gas emissions by 360,000 tons of carbon dioxide annually.

A part of the loan will be used for project capacity building of Assam Power Generation Corporation Limited (APGCL) on construction, operations and maintenance and safeguards. The project will finance APGCL’s enterprise resource planning system.

It will also contribute to improving gender equity by enhancing the gender capacity of APGCL and improve women’s participation and contribution in training and community led interventions, the statement noted.

The project will add to Assam’s power generation capacity from clean hydroelectric sources and improve electricity availability, said C S. Mohapatra, Additional Secretary, Department of Economic Affairs in the Ministry of Finance, after signing the agreement.

“Increased supply of affordable and clean electricity facilitated through the project will help improve living conditions, promote business expansion, and increase employment opportunities in the state beside reducing greenhouse gas emissions,” said Hoe Yun Jeong, Officer-in-Charge of ADB’s India Resident Mission, who signed on behalf of the lending agency.

A $2 million grant from Japan fund for poverty reduction (JFPR) is also associated with the project to finance equipment and consulting services to improve capacity for resource management and community resilience, the Ministry of Finance said.

The ADB, which is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, was established in 1966 and is owned by 68 members, including 49 from the region.