The Lakwa power plant in Sivasagar district of Assam. Picture by UB Photos

Guwahati, Nov. 13: The Asian Development Bank (ADB) will provide $45 million for the renovation of the 60MW Lakwa power plant in Sivasagar district of Assam.

Sources said the existing 60MW gas plant at Lakwa thermal power station phase-I was over 30 years old and needed replacement on account of low efficiency and non-compliance to the existing emission norms.

The aid will also help meet the ever-increasing demand for reliable and sustainable power in the state.

At present, Assam is facing a peak hour shortfall of 202MW. While the peak hour demand is 1,150MW, only 948MW is available.

Inadequate supply of gas, low water level at the site, maintenance of machines often causes power disruptions.

According to ADB, the total cost of the renovation is $65 million of which $20 million will be the equity contribution by Assam Power Generation Corporation Ltd (APGCL), which will be the executing-cum-implementing agency of the project.

This would also be the first time that ADB will be directly engaged in a power project in the state.

The loan will be used to replace an old and inefficient gas plant and fund institutional-capacity development and project preparation.

The project has already got the environment clearance.

The bank said the power produced from the new plant would be put into the grid, which will be used by the distribution companies to supply to people in general and other beneficiaries.

“Though no specific beneficiaries have been identified, it would have positive impact on the people of Assam and local people in terms of providing temporary job opportunities during construction. The project has the capacity to indirectly improve the quality of life of the beneficiaries in the project area by providing them with opportunities to increase their incomes through employment and alternative livelihoods,” the bank said.

Sources said adequate land within the Lakwa power station complex was available, and no rehabilitation and resettlement issues were involved.

The project site does not affect any biodiversity rich area, or any forest area. It is situated within the power station complex, therefore, there are no land acquisition and change of land use involved.

The thermal power station was commissioned in 1981. The main fuel for the project is natural gas.

It was the second gas-based thermal power station with an initial gas commitment of 0.23 metric million standard cubic metres per day from Oil and Natural Gas Corporation in 1977.

Currently, the APGCL has supply agreement with Oil India Limited and Gas Authority of India Limited for the supply of 0.4 and 0.5 metric million standard cubic metres per day of gas respectively.