New Delhi, January 4: The Asian Development Bank (ADB) will provide a USD 100 million (around Rs 730 crore) loan to modernise and upgrade the power distribution system in Bengaluru city, a finance ministry statement said.

Beside the USD 100 million sovereign loan, ADB will provide a USD 90 million loan without sovereign guarantee for the project to Bangalore Electricity Supply Company Ltd (BESCOM), one of the five state-owned distribution utilities in Karnataka. Asian Development Bank, India Sign $177 Million Loan for State Road Improvements in Maharashtra.

"The ADB and the Government of India on December 31, 2020 signed a USD 100 million loan to modernise and upgrade the power distribution system to enhance the quality and reliability of electricity supply in Bengaluru city in the state of Karnataka," the statement said.

In parallel to underground distribution cables, over 2,800 km of fibre optical cables will be installed to strengthen communication network. Moving about 7,200 km of distribution lines underground will help reduce technical and commercial losses by about 30 per cent, it said.

The fibre optical cables will be used for smart metering systems, distribution automation system (DAS) in the distribution grid, and other communication networks.

The project will install 1,700 automated ring main units adapted with a DAS to monitor and control the distribution line switchgears from the control centre, it added.

The statement further said the loan will strengthen the capacity of BESCOM in operation and maintenance of underground cabling, environment and social safeguards, financial management and commercial financing. Improved financial management capability will help BESCOM access domestic and international commercial financing market.