The Asian Development Bank (ADB) and the Government of India have signed a $100 million loan to modernise and upgrade the power distribution system in Bengaluru. The loan will strengthen the capacity of BESCOM in operation and maintenance of underground cabling, environment and social safeguards, financial management and commercial financing. Improved financial management capability will help Bangalore Electricity Supply Company Limited (BESCOM) access the domestic and international commercial financing market.
The signatories to the Bengaluru Smart Energy Efficient Power Distribution Project were Dr C S Mohapatra, Additional Secretary – Department of Economic Affairs, Ministry of Finance and Hoe Yun Jeong, Officer-in-Charge, ADB’s India Resident Mission.
Dr Mohapatra stated that the conversion of overhead distribution lines into underground cables will help build an energy-efficient distribution network, reduce technical and commercial losses and minimise electricity outage resulting from natural hazards like cyclones and external disturbances to overhead lines.
Besides the $100 million sovereign loan, ADB will provide a $90 million without sovereign guarantee loan for the project to BESCOM, one of five state-owned distribution utilities in Karnataka.
Jeong said that the project demonstrates an innovative financing arrangement, the first of its kind for ADB, by combining sovereign and non-sovereign loans for a state government-owned enterprise. This is intended to significantly reduce sovereign exposure and help BESCOM move towards a market-based approach for raising funds for capital expenditure.
In parallel to underground distribution cables, over 2,800 km of fiber optical cables will be installed to strengthen the communication network. Moving about 7,200 km of distribution lines underground will help reduce technical and commercial losses by about 30%.
The fiber optical cables will be used for smart metering systems, distribution automation system (DAS) in the distribution grid and other communication networks. The project will install 1,700 automated ring main units adapted with a DAS to monitor and control the distribution line switch gears from the control centre.