Companies & Sectors
World Bank to provide $2 billion for improving power supply in rural India

The multilateral lending agency says unexploited renewable energy sources can generate cost-effective power for rural people, increase total supply and minimise losses. Commits $2 billion in funding over three years

A new World Bank report says that generating power locally and distributing it through existing facilities can help to bring electricity to more rural households in India that yet do not have access to power.

The report says that this model should be actively encouraged and implemented in areas where electricity supply is poor and people have to depend on diesel and kerosene. About 56% of rural households, or 400 billion people in the country, do not have access to electricity today.

"Though these kinds of projects are on a small basis, financial institutions and other private players should come forward to support it," said Ashish Khanna, senior energy specialist, South Asia Sustainable Development, World Bank.

The report, titled 'Empowering Rural India: Expanding Electricity Access by Mobilising Local Resources', is based on studies conducted in Maharashtra's Kolhapur district, where the state's unexploited renewable energy sources could harness substantial economic gains, not just for the rural people, but for the state, it said.

For instance, the report explains, an average rural household spends Rs11 per kilowatt hour to meet its lighting needs, which is higher than about Rs4.60/kWh for small hydro, Rs5.70/kWh for biomass and Rs6.10/kWh for wind power. It found that this model would also increase the supply of electricity per day from an average of 8-10 hours to day-long supply.

This decentralised system, which it calls distributed generation and supply (DG&S) franchises, is a cost-effective and feasible way to generate cost-effective energy in rural areas. It can not only increase supply and reduce costs for the consumer, but also reduce losses for the utility company and meet the goal of improving availability of electricity in rural areas.

Explaining the DG&S model, the report said that the DG&S operator invests in a small-scale (typically 1MW to 10MW peak capacity) local generation plant and also becomes a distribution franchisee of the utility for the designated area. Today, small hydro and biomass projects are more feasible in rural areas, whereas solar projects are feasible in urban areas as they contain complicated technologies, Mr Khanna said.

The rural franchisee in addition to distributing power and collecting revenues, also generates power locally and supplies to the franchised area. The local community benefits because certain minimum percentage of the generated power goes to the designated area and the balance is fed into the grid.

Mr Khanna said that the World Bank and the International Finance Corporation (IFC) has decided to provide about $2 billion through loans for renewable energy projects over the next three years. While the World Bank will fund government projects, IFC will finance private efforts.

The 1,500MW Nathpa-Jhakri hydro project in Himachal Pradesh was among the first renewable energy projects in the country that was funded by the Bank. It was developed by Satluj Jal Vidyut Nigam (SJVN), a joint venture of the state and central governments. SJVN is supplying power to nine northern states and aims to commission a second mega hydro project in 2013.

Mr Khanna said the World Bank's loans outstanding to the overall power sector in the country are at $3.4 billion and the IFC's at about $1 billion.

"In the South Asia, many people don't have access to electricity and most of them are in India," said Inger Andersen, vice-president at the World Bank's Sustainable Development Network unit. "Such initiatives drawing on the involvement of the local community leads to socio-economic development in the area, thereby promoting inclusive growth."



Shadi Katyal

6 years ago

Does World Bank aware that these funds will not be used for rural electrification as the Minister of Environment doesn't feel that opening coals mines and building new power plants will create more pollution problems.He will not allow such projects and let the nation go to stone age.
Has World Bank taken any guarantee of accountability of these funds. It is India and such funds will disappear without any help for the poor. Look at all the proejcts so far to help the poor

CBI conducts raids at offices of DMK-run Kalaignar TV

The raids came in the wake of allegations that that there was a connection between accused Shahid Usman Balwa-promoted Swan Telecom and the TV channel

Chennai: The Central Bureau of Investigation (CBI) today carried out searches in the offices and residences of top management of DMK first family run Kalaignar TV in connection with the second generation (2G) spectrum scam, reports PTI.

The raids came days after the channel claimed it had no links with the case.

Official sources said searches began in the wee hours to probe certain financial transactions that could be connected to the spectrum scam that has already seen the arrest of former telecom minister A Raja.

The raids came in the wake of allegations that that there was a connection between accused Shahid Usman Balwa-promoted Swan Telecom and the channel.

Mr Balwa was allegedly favoured by Mr Raja in the grant of the Unified Access Service (UAS) licence and scarce radio waves.

Officials said the crux of the probe relates to the over Rs200 crore loan arranged by Mr Balwa's DB Realty group for Kalaignar TV.

DMK chief M Karunanidhi's wife MK Dayalu owns 60% stake in Kalaignar while party MP Kanimozhi has 20%.

The CBI had told a court recently, "It has also come to light that there was a transaction of Rs214 crore from Cineyug Films Private Limited to Kalaignar TV in 2009.

"The funds were arranged by Cineyug Films from DB Group companies wherein the family members of Mr Balwa are the directors or shareholders", CBI had said in its application filed before the court.

Kalaignar TV's denial earlier had followed CBI's allegations that there was a connection between scam accused Mr Balwa-promoted Swan Telecom and the channel.

Managing director of Kalaignar TV, Sharad Kumar had denied receiving pay-offs from DB realty, whose chief Mr Balwa is in CBI net along with Mr Raja.

Mr Kumar had also said the sum received from Cineyug Films was an "advance for transaction of shares", and was returned with interest when the two parties differed over the price evaluation of shares.

He had said that the money from Cineyug was received as loan which had been repaid with interest and the Income-Tax department was aware of the transaction.


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