The Indian state of Madhya Pradesh has been granted a $350 million (£213.8m) loan to upgrade its power networks and help meet the increasing demand for energy.

The state is expected to see demand for electricity rise by around 11% a year between 2013 and 2017, resulting in a potential transmission and distribution capacity gap of around 20%, the Asian Development Bank (ADB) said, which is providing the loan.

The mismatch between supply and demand means only around two-thirds of all homes are currently connected to the grid.

The cash will fund around 1,800 kilometres of transmission lines and more than 3,100 kilometres of distribution lines as well as building and upgrading substations.

Herath Gunatilake, Lead Energy Economist in ADB’s South Asia Department said: “The state has made impressive network gains in recent years but demand is outstripping supply and the quality of electricity needs further improvements, especially in rural areas. Our assistance for transmission and distribution improvements will help Madhya Pradesh’s efforts to provide good quality power, 24 hours a day.”