ADB's $1.5 Billion South Asia Connectivity Plan to Boost Power Transmission

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Asian Development Bank (ADB) (Manila) plans to loan funds to a $1.5 billion scheme to improve cross-border connectivity and increase energy cooperation among Bangladesh, India, Sri Lanka, Nepal and Bhutan over a three-year period. The plans include increasing cross-border power transmission capacity.

Of the total amount loaned, energy cooperation will receive $325 million, or 24%, while $1.11 billion, or 74%, will go into improving cross-border connectivity. The project will result in a 500-megawatt (MW) transmission capacity between Bangladesh and India; a 1,000-MW capacity between India and Nepal; and a 1,000-MW cross-border line will be used for transmission between India and Sri Lanka. Trade facilitation will receive $40 million.

Power transmission is an integrated part of the plan, which is included in the ADB's draft regional cooperation strategy for 2012-14. The loan program will be presented to the bank's board for final decision soon.

ADB estimates that the intra-regional trade of South Asian countries will increase from the current 3.9% to more than 6% by 2014 after the completion of the program. Currently, South Asia is home to 25% of the world 's population, but it accounts for only 3% of global GDP.

Under the plan, the cross-border transit time of trucks from Kolkata to Dhaka will be reduced from 20 days to 11 days. Sub-regional cross-border freight traffic will increase from the current $5 billion to $6 billion in 2015. ADB says that road transport caters to 65% to 70% of freight movement in South Asia.

The plan will see 1,000 kilometers of regional transport routes constructed or improved. The container-handling capacity of Sri Lanka's Colombo port will be increased 50% and other projects will be active in road and rail networks, and air and maritime gateways.

The region has one of the largest rail networks in the world, with 77,000 kilometers of routes, 70% of which are in India, Pakistan and Sri Lanka. There are interconnections by mainline and deep sea container ships. Intra-regional air transport has seen passenger travel grow 12% and airfreight at 7.5% annually during 2001-04.

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