The sub-station would be setup at Pillaiteruvasal area and the Union Territory Government had already deposited Rs 30 crore with the Power Grid Corporation of India to execute the work, he told reporters here.
Karaikal is an enclave of the union territory of Puducherry.
The 230/110 KVA sub-station will directly get power from Neyveli Lignite Corporation and erection works would be completed before the end of 2018, he said.
The Minister said this move would give a fillip to the industrialisation efforts in Karaikal district.
He said the Electricity department was setting up underground cable feeders at Karaikal to ensure uninterrupted power supply even during heavy rains and floods.