World Bank offers financial aid to Bihar in power sector

Aid targets revamping electricity distribution network, especially in rural areas

The World Bank has shown keen interest in financing Bihar Government's ambitious project to revamp power infrastructure. The state government is planning to invest around Rs 25,000 crore under this project, for which it has sought funds from various financial institutions.

The Bank has decided to offer financial aid to the state government for revamping its electricity distribution network, especially in the rural areas.

"The state has done a remarkable job in terms of development in last few years," World Bank Country Director Onno Ruhl told Business Standard, "However, a lot is still needs to be done. We want to help Bihar in social and infrastructure development schemes. The energy sector will be one of our focus areas."

He added that the international funding organisation would like to provide financial assistance to state government in its ambitious plans to revamp its power distribution infrastructure.

Ruhl said, "Ministry of Finance has asked us to increase funding in the states like Bihar. Power is one of the major areas where the state needs to perform better. The state government has taken up ambitious work to connect every village with electricity in next couple of years. The Asian Development Bank (ADB) is already engaged with the state government and taken up larger works related to generation and transmission. We want to help the state government in revamping its distribution network, especially in the rural areas. Energy access will open new opportunities for the state."

Bihar has one of highest transmission and distribution losses in the country. The state loses almost half of its power before it even reaches to the final consumer.

Therefore, the state government has taken up an ambitious plan to trim these losses.

Early this year, the state government inked an MoU with the PowerGrid Corporation to change its obsolete transmission network. It has also decided to revamp its distribution network.

It is planning to invest around Rs 25,000 crore under this project. Majority of the funds will come from centrally sponsored schemes like Accelerated Power Development and Reforms Programme (APDRP), Backward Region Grant Funds (BRGF) and Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY). The state government has also sought financial assistance from various financial institutions for this purpose, including the World Bank.