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WB releases $400 M for Indian power project
By agencies
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Friday, 20 January 2006, 20:30 IST
WASHINGTON: The World Bank has approved a $400 million loan to the Power Grid Corporation of India to help the country utilize electricity resources better and strengthen transmission systems.
The allocation has been made for the Power System Development Project and is backed by a Government of India guarantee.
The World Bank said that India has identified the power sector as key to achieving its goals of high and sustainable economic growth and to reduce poverty. However, with peak time power shortages of a little more than 12 percent the power sector is currently "inadequately" positioned to support these goals.
World Bank India Director Michael Carter said, "India continues to face severe power shortages that translate into substantial losses to the economy. It stifles development of industry and commerce, increases the cost of doing business, and reduces productivity."
"The reform agenda is a complex one; while progress has been mixed, this project will help realize the goal of optimal utilization of electricity resources across the country."
According to the Bank the project for which the allocation has been made will improve service delivery of the Power Grid Corporation of India by strengthening transmission system in power deficit regions and increasing inter-regional transmission capacity.