A north eastern state in India has been granted a $300 million (£174.8m) loan which will fund energy generation and distribution upgrades.

It will be used to build a 120MW hydropower plant in Assam, finance energy efficient equipment at existing facilities and new distribution lines and substations as well as train staff at state power companies.

More than a third of households in Assam face daily electricity cuts of five to six hours and many businesses such as tea gardens are still not connected to the grid. They have to buy up to 15% of their power from independent producers at very high cost, according to the Asian Development Bank (ADB) which is providing the loan.

Herath Gunatilake, Lead Energy Specialist with ADB’s South Asia Department said: “By funding measures to cut load shedding, the loan is expected to benefit over 2.7 million consumers.”

The funding is part of a broader 10-year, $3.5 billion (£2bn) state investment programme.

• ADB, Assam, hydropower, India