The Madhya Pradesh Government has sought a loan amounting to Rs. 8,900 crore from the Asian Development Bank and World Bank to ensure power supply in the state's rural areas.

The amount would be used in reducing losses during electricity distribution, improving reliability of power and increasing system capacity.

The MP government has already started a project to separate power feeders for agriculture and rural domestic in a bid to reduce technical and commercial losses of power and supply power at ultra high voltage.

"Three power distribution companies of the state, MP Madhya Kshetra Vidyut Vitran Company, Purva Kshetra Vidyut Vitran Company and Paschim Kshetra Vidyut Vitran Company have demanded three loans of Rs 3,000 crore, Rs 3,500 crore and Rs 2,400 crore respectively for the purpose," said a government source.

The source added that so far, 273 feeders had been separated and the government was planning to separate feeders at Tehsil level and this would mitigate power pilferage cases.

The power distribution losses in the state are as high as 50 percent. Cases of power pilferage and use of subsidized power supply are common in rural areas. Insufficient funds are a concern for the state government.

Recently, ADB has approved loans worth $ 200 million for Assam. Government sources said that the approved amount would be used to fund partly the state's $764 million ‘power sector investment' plan by 2014.