The Asian Development Bank (ADB) has agreed to provide a loan to the Indian state of Meghalaya for upgrading the power distribution network and improving the power quality.

ADB’s $132.8m loan will be used to support the project that will see the construction of 23 new substations, renovation of 45 substations, and provision of control room equipment and protection systems.

ADB South Asia senior energy specialist Jaimes Kolantharaj said: “This project fully supports Meghalaya’s Power for All initiative in providing quality electricity 24 hours, seven days a week to households, industries, businesses, and the public.

“By modernising and improving the distribution network, the project will improve the operational efficiency of the distribution system and the financial sustainability of the distribution business in the state.

“Improving access to electricity and creating economic opportunities in rural areas will help address poverty, promote rural development, and reduce inequality.”

Additionally, the project will involve the installation and upgrade of 2,214km of electricity distribution lines and associated facilities, covering three out of the six circles in the state.

The loan will also be used for replacing old electromechanical metres with smart metres across 180,000 households.

ADB’s loan will be accompanied by a $2m grant from its Japan Fund for Poverty Reduction.

The fund provides financing to mini-grids to improve power quality while supporting income generation, especially for women and other socially disadvantaged groups.

As part of the project, a distribution sector road map and a financial road map will be developed for the Meghalaya Power Distribution Corporation (MePDCL) that will help the power company to operate and manage the distribution networks.