New Delhi, Aug 17 - The World Bank Monday said it will give a loan of $330 million to Haryana to strengthen the power transmission and distribution system in the state.

'These transmission and distribution investments will ensure high economic returns and significant welfare improvements for consumers - both urban and rural,' Roberto Zagha, World Bank's country director for India, said Monday.

Sudeshna Banerjee, an economist at the bank, said: 'This project provides an opportunity for the bank to re-engage in the state power sector and contribute to the government's investment program and institution development agenda.'

The bank's aim is to make the state's electricity transmission and urban distribution business 'more efficient, cost-effective and responsive', she added.

The loan from the International Bank for Reconstruction and Development (IBRD) has a 30-year maturity which includes a five-year grace period.

Haryana has available generation capacity of 4,680 MW and the power shortage ranges between 400-600 MW in off-peak hours and between 1,200-1,500 MW during peak hours, resulting in a peak deficit of about 26-36 percent.