The World Bank has approved a 330 million U.S. dollar loan designed to strengthen the electricity transmission and distribution system in the northern Indian state of Haryana, said a World Bank official Saturday.

This project is also in support of the state's broader goals of sustainable and inclusive growth, said World Bank economist and project task team leader Sudeshna Banerjee in an interview here.

Haryana has been a power deficit state for several years. With installed available generation capacity of 4,680 Megawatt, the power shortage ranges between 400-600 megawatt in off-peak hours and between 1,200-1,500 megawatt in peak hours resulting in a peak deficit of about 26 to 36 percent.

"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. The state is also grappling with the twin challenges of serving a growing and commercially vibrant urban and industrial customer base while also revitalizing the rural economy," said Banerjee.

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 Haryana Vidyut Prasaran Nigam Limited.

"This project will provide an opportunity for the Bank to re-engage in the state power sector and contribute to the government's investment program 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 Banerjee.

"From the actions it has already taken, Haryana is demonstrating a strong commitment to improve the availability, quality and reliability of its power supply which is critical to the state's economic development," she added.

Source: Xinhua