New Delhi, March 31 (IANS): Japan Monday signed a loan agreement with India to provide 26,800 million Yen (Rs.1,604 crore) for upgrading power distribution in Haryana, a spokesman said.

The agreement was signed in the capital by Shinya Ejima, Japan International Cooperation Agency (JICA) chief representative in India, and Rajesh Khullar of the union finance ministry.

"The project aims to augment distribution facilities in areas with increasing demand and reduce electricity distribution losses in Haryana, where rapid industrial development and economic growth have led to a drastic rise of electricity demand," a JICA spokesman said.

The Haryana Distribution System Up-gradation Project will help curb distribution losses and avoid power cuts due to electricity theft and other reasons.

The loan will be used for construction of new substations, augmentation of existing substations, introduction of automated meter reading, installation of meter pillar boxes and other purposes.

The project will be executed by the Uttar Haryana Bijli Vitran Nigam Ltd. and the Dakshin Haryana Bijli Vitran Nigam Ltd. It is expected to be completed by June 2019.

At least 325 Japanese companies are operating in Haryana. Leading names include Suzuki, Honda, Canon, Yakult, Denso, Mitsubishi, Toyo, Daikin, Yokohama, Showa, Nippon, Kansai Paints, Asahi and Stanley.