World Bank to provide USD 250 mn loan to Rajasthan to improve power distribution

The World Bank will provide a USD 250 million loan facility to Rajasthan for improving the performance of its electricity distribution sector, the Union Finance Ministry said today.

An agreement was signed here among the Government of India, the Government of Rajasthan and the World Bank.

The Second Programmatic Electricity Distribution Reform Development Policy Loan for Rajasthan is the second in the series of two operations planned for a comprehensive turnaround of Rajasthan's electricity distribution sector, the ministry said.

The first loan closed in March 2017.

Electricity distribution utilities (DISCOMs) in Rajasthan provide electricity to about 9.5 million customers.

The key areas that the programme will support include, strengthening governance in the distribution sector by establishing annual performance MoUs between the DISCOMs and the State Government.

"This operation will deepen the institutional and operational reforms that were launched in late 2015 centered around the Government of India's (GoIs) Ujwal DISCOM Assurance Yojna (UDAY), which Rajasthan joined in 2016 and the Rajasthan State Electricity Distribution Management Responsibility (RSEDMR) Act...," the ministry said in a statement.

To address the concerns of affordability and access to electricity for the poor, the program also supports the Government of India's Domestic Efficient Lighting Program (DELP), under which more than 15 million LED lamps have been distributed in the state.

The loan from the International Bank for Reconstruction and Development (IBRD), has a 3-year grace period, and a maturity of 21 years.