Announcement of India to Ease Power Shortages in Southern Region on June 8, 1987

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 87/78 Contact: Pastor B. Sison (202) 477-3653 INDIA TO EASE POWER SHORTAGES IN SOUTHERN REGION WASHINGTON, June 8 -- India will ease power shortages in the State of Karnataka with the assistance of a $330 million loan from the World Bank. Three other southern India states -- Andhra Pradesh, Kerala, Tamil Nadu -- . will benefit from the $947.2 million project. The project includes the construction of low-cost hydropower facilities at two sites in the Kalinadi River basin, and the implementation of a power transmission plan to increase supply and reduce system losses. Hydropower facilities will be built at Kodasalli and Kadra, two sites identified for development by the Karnataka Power Corporation (KPC), the state agency for power generation. The transmission plan, prepared by the Karnataka Electricity Board (KEB), the agency responsible for power transmission and distribution in the state, includes construction of 570 kilometers of 400-kilovolt lines and about 300 kilometers of 220-kilovolt lines with associated substations. The KEB plan is expected to strengthen transmission between the Kalinadi power generation complex in the northwest of Karnataka and the state's largest load center, Bangalore, in the southeast. A power distribution plan will be prepared for Bangalore, the state capital and India's fastest growing city, to respond to growing demand for electricity. KEB's distribution planning methods will be modernized. Also, the Sharavathi power station, the most important in the state and about 50 miles south of Kalinadi, will be renovated. Institutional and financial improvements will be implemented within KEB and KPC. Certain KPC activities will be computerized, including a generation management scheme for the Kalinadi complex. Consultants will assist in the technical aspects of the project, including the design of facilities to integrate power operations in southern India. In addition to the Bank loan, other financing will be provided by the Karnataka State Government ($449.3 million), KPC ($85 million), KEB ($55.9 million), and the Kuwait Fund for Arab Economic Development ($27 million). The project will be implemented over eight years. The World Bank loan is for 20 years, including five years of grace, at the standard variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. Note: Money figures are in U.S. dollar equivalents.