Transmission to Transformation: the Road to Job Creation and More
March 26, 2014 - Back in 2003, IFC committed a 15-year loan of $75 million to Powerlinks Transmission Limited in Bhutan to feed power to electricity-starved northern India and help generate revenues for Bhutan. An IFC study last year revealed the project achieved well beyond its original goal - its impacts include creating about 75,000 new formal jobs in India over 2006-2012.
IFC backed this first-of-its-kind project involving building, owning and operating power transmission lines in India to enable power transmission from the Tala Hydropower plant in Bhutan. Construction started in 2003 and the plant became operational in 2007.
Arvind Singh, CEO, Powerlinks Transmission Limited's remembers, “Powerlinks and Tala were conceptualized and commissioned to be complementary. By bringing power to the Indian states of West Bengal, Bihar, Uttar Pradesh among others, this pioneering project has helped improve living standards of the common man and woman.”
South Asia’s first public-private partnership transmission line project at that time, this was a joint venture between Indian private utility Tata Power and India's state-owned Power Grid Corporation. Bhutan’s Tala 1000 megawatt hydro project, built and financed by neighboring India, helped add significant revenues for Bhutan while meeting India’s energy needs.
According to T. Gyeltshen, General Manager, Transmission, Bhutan Power Corporation, “Tala is a strong link between India and Bhutan. Most of Tala’s power is exported and is a big contributor to our GDP."
IFC’s evaluation study showed that increased power impacts output, growth and employment. It used an innovative methodology to go beyond traditional methods of assessing jobs created during construction, operations and maintenance. It also assessed jobs created as a result of power supplied to smaller business owners and entrepreneurs – who could then expand their business and hire more people to manage growing operations.
The study highlighted:
Indirect and induced jobs created were far higher than direct jobs, demonstrating that the project has economy-wide spillover effects. Induced jobs could reach over 100,000 people.
Jobs created during construction added $94 million to household income, with transmission lines built through some of India’s poorest states. The project employed local skilled and unskilled workers.
One percent growth in electricity consumption in India is likely to result in 0.53 percent growth in employment. Power reliability also helps firms reduce production losses, save costs.The project has contributed almost 9 percent to Bhutan's GDP – freeing up resources for education and health as a result.
Dasmohapatra, Energy Director with the Confederation of Indian Industries says, "Power generated is reliable and enables industries in Bihar and West Bengal to operate for longer hours."