New Delhi: In order to help Bihar meet the shortage of power in the state, the Asian Development Bank (ADB) on Wednesday sanctioned a grant of Rs 594 crore (USD 132 million) to the state.

Finance Ministry’s Joint Secretary of economic department Venu Rajamoni and ADB’s Prodyut Dutt signed the multi-crore deal while Bihar State Electricity Board Secretary Ganesh Prasad and Joint Secretary Shambhu Nath Mishra signed the accord with ADB.

It is expected that the Rs 594 crore investment will help strengthen Bihar's power sector.

With the help of this aid from the multilateral funding agency, Bihar will be able to provide 472579 mega watts of electricity per year to the customers till 2015.

Even the losses suffered due to the transmissions will be curtailed by at least 3 percent in seven districts.

The statement also said that major portion of the ADB loan USD 130.3 million will be used to finance infrastructure such as transmission lines.

The remaining USD 1.9 million will be used for strengthening the internal capacity of the Bihar State Electricity Board (BSEB).

Rajamoni said this is Bihar’s first loan to improve the power sector. “The loan will be used to install new transmission lines and to renovate and modernise transmission and distribution facilities to improve the quality and reliability of the state's electricity supply network,” he said.

According to Prodyut Dutt, earlier ADB availed USD 420 million for Bihar State Highway Phase-1 in 2008 and second loan of USD 300 million was granted in 2012 for the second phase.

Notably, ADB will assist BSEB with project implementation and construction supervision, including training in the maintenance and operation of high-voltage distribution systems (HVDS).