ADB to Support Sustainable Development of Sikkim's Power Distribution Sector

MANILA, PHILIPPINES (16 May 2024) — The Asian Development Bank (ADB) has approved a $148.5 million loan to help strengthen, modernize, and climate-proof distribution system to enhance reliability, quality, and resilience of electricity supply in Sikkim, India.

“This project fully supports Sikkim’s Power for All initiative, ensuring round-the-clock uninterrupted access to quality electricity for households, industries, businesses, and the public. Additionally, it synergizes with the Government of India’s Revamped Distribution Sector Scheme by enhancing the distribution network, thereby boosting operational efficiency and financial sustainability of the distribution business in the state,” said ADB Principal Energy Specialist Jaimes Kolantharaj. “The project will facilitate the efficient transfer and integration of renewable energy into the distribution system and provide improved access to electricity in rural areas and businesses, thereby increasing economic opportunities, ensuring productivity, and improving living conditions.”

The project will upgrade and modernize Sikkim’s power distribution system by upgrading it with approximately 770 kilometers of climate-resilient medium-voltage underground and/or covered conductors. Additionally, it will replace 580 kilometers of aging and low capacity bare conductors with new ones to increase distribution network capacity. It will upgrade 26 existing power substations including the installation of a supervisory control and data acquisition system, install 15,000 units of public street lighting in remote areas, and conduct electricity conservation and safety awareness programs in 28 villages.

ADB will help develop a financial sustainability strategy and a plan to establish Sikkim's Power Department (PDS) as an independent entity, aimed at enhancing the financial sustainability of the electricity sector. Additionally, it will assist PDS in formulating a power distribution master plan, integrating geographic information systems and distribution system modeling, establishing a real-time monitoring control center to enhance power management, and devising a strategy for gender and social inclusion.

The project will enhance the livelihoods of a minimum of 1,100 women, comprising self-help groups, producer groups, and individual businesses, through the installation of tailored renewable energy systems and improving their vocational skills. Additionally, it will deploy solar energy systems and energy-efficient electrical equipment in 24 primary health care subcenters to enhance the capacity of rural health care facilities to offer in-patient treatments, especially during the winter months.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.