India: Harvesting the Results of a Reliable Power Supply in Madhya Pradesh | Asian Development Bank

India: Harvesting the Results of a Reliable Power Supply in Madhya Pradesh

Project Result / Case Study | 8 November 2018

Policy makers in the central Indian state of Madhya Pradesh recognized that their state needed to improve its power system. It needed more supply and better distribution systems. It also required the policies that would keep the system vibrant and well-maintained. Most importantly, it needed a system that provided last mile connectivity and power supply for all—from the poorest farmer in the most remote area to job-creating factories in the big cities.

The state did not simply need more power plants and distribution lines. It needed an innovative solution that took a holistic approach toward providing reliable power statewide. In December 2001, ADB partnered with the state government to launch the Madhya Pradesh Power Sector Development Program. Delivered in two tranches, the program combined investment in physical infrastructure, such as power plants and distribution lines, with assistance that addressed key reform areas in the power sector.

A Long-standing Problem

Up until 2008, the state of Madhya Pradesh was losing more than a third of its power within the distribution system. Voltage fluctuations were common. Farmers and small businesses were among those most affected as motor pumps would malfunction and electrical equipment often prematurely damaged.

To enhance the reliability of the distribution network, reduce losses, and improve the overall quality of the power supply, Tranche 2 of the ADB-funded Madhya Pradesh Power Sector Investment Program supported the installation of modern systems—including a high-voltage distribution system and remote metering—that improved efficiency and helped reduce system losses.

Power availability improved to 10 hours in rural areas and 24 hours in cities, with fewer interruptions, improved voltage, and fewer surges.

As a result of the program, power losses declined from 38% in 2008 to 24% in 2014, and further to 22% in 2015. Power availability improved to 10 hours in rural areas and 24 hours in cities, with fewer interruptions, improved voltage, and fewer surges.

“Quality of power supply and last mile connectivity to every household are major achievements under the project,” says Mukesh Chand Gupta, Managing Director of Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited, the executing agency of the project in Jabalpur city. “The positive socioeconomic impacts of the availability and quality of power supply on people in rural areas in the region are clearly visible,” he adds.

Farmers Benefit

Farmers who had long dealt with power access problems were among those that benefited the most. There is a strong connection between power and water supply because irrigation pumps need reliable electricity to operate. The assured power supply has enabled farmers not only to increase crop productivity, but also to cultivate three crops per season rather than the traditional two-crop rotation.

“Earlier, crop productivity was poor because crops would get damaged due to a lack of water caused by an irregular power supply,” says Chhatar Pal Kaurav, head of Singhpur Chhota village in Narisinghpur District. “Now, we are sowing a third crop due to the regular power supply to pumps,” adds Chhatar.

The increased water supply is also allowing farmers to diversify their crops beyond rice and sugarcane. Improved incomes related to the consistent availability of electricity have created a multiplier effect in the statewide economy. “The impact of a regular power supply to the agriculture sector became visible in 2017 when the region received limited rainfall,” says Chhatar. “Increased electricity supply during the dry season became the savior of our crops, which otherwise would have been badly damaged.”

Statewide Impact

“Regular power supply with better voltage has proved to be a boon for farmers like me.”

Moolchand Malviya, farmer

Tranche 2 of the program funded the installation of more than 15,000 transformers and the conversion of more than 4,000 kilometers of lines from low voltage to high voltage. This reduced system losses and improved power supply quality and reliability. Tranche 2 of the program also helped address consumer concerns about the quality of electricity supply, halving the number of complaints received.

Improved meters allowed the monitoring of real-time electricity consumption, which lowered technical losses from more than 35% to below 22%. The economic value of reduced losses was equivalent to 764 gigawatt-hours per year. The program has provided opportunities for job creation, income growth, and upgrading of local infrastructure, which have resulted in reduced poverty in the state, says Jyotirmoy Banerjee, who is overseeing the program for ADB.

“The enhanced distribution capacity and reliability have lowered maintenance costs of electric appliances, irrigation pumps, and equipment. It has also minimized the need for replacement of existing machines, thereby improving economic opportunities of farmers, as well as industrial and commercial consumers,” he says.

The program installed a small distribution transformer 50 meters from the house of Manoj Mihaulia, a 38-year-old resident of Panari village in Narsinghpur District. “Now, it is easier for the electricity staff to detect and mend a fault in the power line,” he says. “Abrupt power outages no longer occur,” he adds.

Moolchand Malviya, a 42-year-old farmer also from Panari village, can see the impact of regular power on his small business making jaggery—a popular sugarcane-based product. This gives him an additional annual income of ₹500,000 (about $7,300) and he now employs 15 workers to help him. “Regular power supply with better voltage has proved to be a boon for farmers like me,” he says.

Results Chain

MADHYA PRADESH POWER SECTOR INVESTMENT PROGRAM (TRANCHE 2)

INPUT
OUTPUT
OUTCOME
  • $45 million loan approved on 4 April 2007
  • 15,575 25- and 16-kilo-ampere 3-phase distribution transformers installed
  • 4,028 km of low-tension lines converted to 11 kV
  • 2,041 km of 33 kV and polyvinyl-encased lines constructed
  • Reduced average distribution losses from 38% in 2008 to 22% in 2015
  • 24-hour power supply for urban areas and 10-hour power supply for rural areas provided
  • Customer complaints halved

Learn more about ADB’s work in India.

This article was originally published in Together We Deliver, a publication highlighting successful ADB projects across Asia and the Pacific that demonstrated development impacts, best practice, and innovation.