World Bank to fund 200 Million USD for Himachal Pradesh Power Sector Reform


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A spokesperson of Directorate of Energy informed here today that  Government of India will provide a financing facility worth about Rs. 1600 Crore through the World Bank for the “Himachal Pradesh Power Sector Development Program”. With the State equity the total program cost will be approximately Rs. 2000 Crore. World Bank funding under this Program is expected to be available by early next year. Both the World Bank and Department of MPP & Power, GoHP are working expeditiously towards finalization of the Program preparation. The Program duration will be of five years, starting from year 2023 to 2028. This Program aims to undertake holistic power sector reforms in a manner to allow for improvements in the renewable energy integration in the State. The key result areas through which this is being targeted is improvements in utilization of the State’s power sector resources (such as,  Hydro & Solar), improvements in reliability of the state’s grid at transmission and distribution level and strengthening of the institutional capacities of the various State’s power utilities/agencies.

Through this Program, the efforts will be made towards promotion of integrated resource planning to allow for comprehensive planning of the power sector, piloting demand response management, improving the technical utilization of the existing hydro power assets to facilitate increased integration with other sources of renewable energy, and the establishing of a single trading desk to allow for efficient trading of the State’s power. These interventions will allow the state to maximize the revenue earned from the sale of energy through renewable balancing capacity. The Program also aims to install new capacities in solar generation of about 200 MW, through HPPCL and HIMURJA. It is important for the State to meet its power requirements to allow for optimal trading and hence the Program shall also focus on strengthening the power network within the state – at transmission (by HPPTCL) and in 13 towns at distribution levels (by HPSEBL). An up gradation of the systems of the State Load Dispatch Center (HPSLDC) would further allow for better management of power demand and supply. Collectively, these all interventions shall allow for an improved transfer of power within the state by improving the reliability and quality of power supply.

One of the major interventions through this World Bank supported Program will be towards strengthening the Environmental & Social systems applicable to the State’s power sector to allow for better monitoring and evaluation of these aspects. The focus here will be to work further on detailed Environmental & Social assessments based on the gap analysis of the existing norms, regulations, and the existing studies. While no new investment in hydropower is envisaged under the World Bank-supported Program, the program will help the State to develop uniform Environment and Social Policy and Procedures for the power sector utilities and provide benchmarks for the sustainable development of renewable energy in the state. Under this program a comprehensive Environmental Social and System Assessment (ESSA) has been carried out. The purpose of this analysis is to understand the environmental and social systems prevalent in the State and how they are aligned to the National laws and other international best industrial  practices. GoHP in association with World Bank has already conducted two stakeholder consultation meetings in the State (one each at Dharamshala & Shimla). The ESSA will be publicly disclosed on the government’s website soon. The World Bank team was recently in Shimla for Pre-Appraisal of the Program. A series of meetings with various heads of Department of Energy Department and other Power Sector utilities were held for finalization of Program preparation.


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