"Loan from AIIB has a 5-year grace period and a maturity of 24 years," release said. (Representational)
The Centre on Tuesday signed an agreement with Asian Infrastructure Investment Bank (AIIB) for borrowing $304 million (over Rs 2,200 crore) to improve power transmission network in Assam.
According to an official release here, the fund will be utilised for the ''Assam Intra-State Transmission System Enhancement Project'', aiming to improve reliability, capacity and security of the power transmission network in the state.
The total estimated cost of the project is $365 million, of which $304 million will be financed by the AIIB and rest by the state government, it said.
"The loan from the AIIB has a five-year grace period and a maturity of 24 years," the release said.
The project aims to strengthen Assam's electricity transmission system by constructing 10 transmission substations, laying transmission lines, upgrading 15 existing substations, transmission lines and the existing ground wire to optical power ground wire.
"The programme will strengthen the existing intrastate transmission network of Assam by augmenting it with newer networks to achieve affordable, secure, efficient and reliable247 power. This will, in turn, bring the state closer to ensuring long-term sustainability of its electricity supply," it added.
The northeastern state is currently witnessing energy deficit, specially in peak hours, and one of the main reasons for this is congestion of electricity distribution and transmission networks.
The Assam Electricity Grid Corporation Ltd (AEGCL), the sole transmission utility in Assam, is responsible for operation, maintenance and development of the transmission system in the state.
AEGCL currently operates 66 substations with 6,882 megavolt-ampere capacity and its transmission network comprises 5,701 circuit kilometers of transmission lines.
The AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia. It began operations in January 2016.