New Delhi, Feb 18 (IANS): The government Monday signed a $350 million loan from the Asian Development Bank (ADB) for improving the power transmission and distribution system in Madhya Pradesh, the finance ministry said Tuesday.

The project would fund about 1,800 circuit kilometres of transmission lines and over 3,100 circuit kilometres of distribution lines, as well as building or upgrading transmission and distribution substations.

"The project will build on previous ADB investments in the state’s power sector, including transmission and distribution assets totalling more than $1.3 billion since 2001," a statement here said.

Its estimated completion date is December 2018, the statement added.

It said the scope of the project is "selective transmission and distribution system improvements critical for meeting the growing demand of power in Madhya Pradesh."

The mismatch between supply and demand in the state has caused regular load shedding in the past, and currently only about two-thirds of all households are connected to the system, the ministry said.

With its economy is growing quicker than the national average, electricity demand in Madhya Pradesh is expected to rise by about 11 percent a year between 2013 and 2017, resulting in a potential transmission and distribution capacity gap of 20 percent, the finance ministry added.