The World Bank has approved a $330-million loan to strengthen the electricity transmission and distribution system in Haryana to support state?s broader goals of sustainable and inclusive growth.
Besides enhancing the physical capacity of the state?s transmission and distribution network, the project also aims to assist the power utilities to step up to address the new business challenges and support institutional development. The project will thus enable the state?s electricity transmission and urban distribution business to become more efficient, cost-effective and responsive. The loan from the International Bank for Reconstruction and Development (IBRD) has a 30-year maturity which includes a 5-year grace period.
The Haryana Power System Improvement Project aims to improve the availability, efficiency, and accountability of electricity supply in the state of Haryana through strengthening of transmission and distribution systems. The transmission component includes priority investments to increase electricity transfer capability and the institutional strengthening of HVPN (Haryana Vidyut Prasaran Nigam Limited).
The distribution component constitutes the first phase of Haryana?s program to improve customer service, distribution efficiency, and accountability in its urban centres. Under this component, DHBVN (Dakshin Haryana Bijli Vitran Nigam) will strengthen the distribution networks in Gurgaon, Faridabad, and Charkhi Dadri by raising voltage levels, bifurcating overloaded feeders, building a new sub-station, and setting up customer care centres.
?This project provides an opportunity for the bank to re-engage in the state power sector and contribute to the government?s investment programme and institution development agenda. The project?s focus on governance improvements and capacity building of the state transmission and distribution utilities will help establish national benchmarks in customer service and operational efficiency,? said Sudeshna Banerjee, World Bank economist and project task team leader. ?The bank also supports Haryana?s initiative to segregate agricultural and non-agricultural feeders, which will not only enable a more accurate estimation of agricultural consumption and resulting subsidy levels, but also facilitate 24-hour power supply to agricultural households.?
Haryana has been a power deficit state for several years. With installed available generation capacity of 4,680 mw, the power shortage ranges between 400-600 mw in off-peak hours and between 1,200-1,500 mw in peak hours resulting in a peak deficit of about 26-36%.
Today, some of the critical issues facing Haryana?s power sector include rising electricity demand coupled with persistent shortages; low-cost recovery through tariffs; rising government subsidies for supply of power; and limited capacity of service providers.