ADB approves $148.5M loan to enhance Sikkim’s power distribution system

The project entails a comprehensive upgrade and modernization of Sikkim’s power distribution system.

The Asian Development Bank (ADB) has given the green light to a $148.5 million loan aimed at bolstering, modernizing, and climate-proofing the distribution system to elevate the reliability, quality, and resilience of electricity supply in Sikkim, India.

According to ADB Principal Energy Specialist Jaimes Kolantharaj, the project aligns seamlessly with Sikkim’s Power for All initiative, ensuring uninterrupted access to high-quality electricity for households, industries, businesses, and the public. Additionally, it complements the Government of India’s Revamped Distribution Sector Scheme by strengthening the distribution network, thereby enhancing operational efficiency and financial sustainability in the state's electricity distribution business.

The project entails a comprehensive upgrade and modernization of Sikkim’s power distribution system. This includes the installation of approximately 770 kilometers of climate-resilient medium-voltage underground and/or covered conductors, as well as the replacement of 580 kilometers of aging and low-capacity bare conductors with new ones to augment distribution network capacity. Furthermore, it involves the enhancement of 26 existing power substations, incorporating the installation of a supervisory control and data acquisition system, along with the deployment of 15,000 units of public street lighting in remote areas. Moreover, the initiative will encompass electricity conservation and safety awareness programs across 28 villages.

In addition to infrastructure improvements, ADB will collaborate on developing a financial sustainability strategy and establishing Sikkim's Power Department (PDS) as an independent entity to bolster the sector's financial viability. Furthermore, it will aid PDS in formulating a power distribution master plan, integrating geographic information systems and distribution system modeling, establishing a real-time monitoring control center, and crafting a strategy for gender and social inclusion.

The project aims to enhance the livelihoods of a minimum of 1,100 women, including self-help groups, producer groups, and individual businesses, by installing tailored renewable energy systems and improving vocational skills. Additionally, it will deploy solar energy systems and energy-efficient electrical equipment in 24 primary healthcare subcenters, thereby augmenting the capacity of rural health care facilities, particularly during the winter months.