Considering the past performance of Assam government in implementing power sector reforms, the Asian Development Bank (ADB) has approved loan worth $200 million for the ‘Power Sector Enhancement Investment programme' in Assam.

Government sources said that the approved amount would be used to partly fund the state's $764 million power sector investment plan by 2014.

The funds would help in improvement of transmission and distribution infrastructure and reduce system losses. A distribution franchise plan, using a public-private partnership model, would be expanded into double consumer coverage.

The Assam CM had recently said that though the reforms had aided the power sector, there was still much to be done.

Pradyut Bordoloi, power minister of Assam said, "For the past 30 years or so, there has been no investment in the power sector. It was with loans from ADB and that too, with 90 per cent as grant, that our government could make major investment in the sector"

He also pointed out that the peak hour power demand in Guwahati had gone up from 80 MW in 2004 to 205 MW now. The peak hour demand in Assam is estimated to increase to 1700 MW by 2014.

The funds are expected to benefit around 1 million households, businesses, hospitals, schools etc. this loan from ADB is expected to be released in three tranches of $60.3 million, $89.7million and $50 million. The interest rate would be based on LIBOR (London Inter Bank Offer Rate)