Himachal Pradesh has secured funding of Rs. 1600 Crore from the World Bank to support the ‘Himachal Pradesh Power Sector Development Program.’ The program aims to implement comprehensive reforms in the power sector, focusing on the integration of renewable energy sources within the state. The total program cost, including the state’s equity, exceeds Rs. 2000 crore.

The funding is expected to be available from August 2023 and will span five years, covering the period from 2023 to 2028. The primary objectives of the program include enhancing the utilization of the state’s power sector resources for renewable energy, improving the reliability of the transmission and distribution grid, and strengthening the institutional capacities of power utilities and agencies.

Under the program, several key initiatives will be undertaken, including the promotion of integrated resource planning, the implementation of demand response management, the optimization of existing hydropower assets to facilitate greater integration with other renewable energy sources, and the establishment of a centralized trading desk to enable efficient power trading within the state. These endeavours aim to maximize revenue from the sale of energy through renewable balancing capacity.

The program also plans to install new solar generation capacities of approximately 200 MW through the Himachal Pradesh Power Corporation Limited (HPPCL) and the Himachal Pradesh Energy Development Agency (HIMURJA). To meet power requirements and ensure optimal trading, the program will focus on strengthening power network infrastructure at the transmission level by the Himachal Pradesh Power Transmission Corporation Limited (HPPTCL) and at the distribution level in 13 towns by the Himachal Pradesh State Electricity Board Limited (HPSEBL). Upgrading the systems of the State Load Dispatch Center (HPSLDC) will enable better management of power demand and supply, resulting in improved reliability and quality of power supply within the state.

Furthermore, the program will emphasize strengthening the environmental and social systems applicable to the state’s power sector, enabling enhanced monitoring and evaluation. Detailed assessments based on gap analysis of existing norms and regulations will inform the development of uniform environmental and social policies and procedures for power sector utilities. The program also aims to promote the sustainable development of renewable energy and encourage greater participation of women in the state’s power sector.

Following the World Bank’s approval of the program in Washington on June 27, 2023, the agreement is set to be finalized in July 2023. The first installment of funds, amounting to Rs. 1600 Crore, is expected to be disbursed to Himachal Pradesh in August 2023. This substantial financial support will be crucial in driving power sector reforms and advancing the sustainable development of renewable energy in the state.