The Government of India and the Asian Development Bank (ADB) signed a USD 175 million loan agreement to support construction of high voltage transmission systems.
This is to evacuate power generated from new mega solar parks to the interstate grid, and improve reliability of the national grid system.
The loan will be given to the Power Grid Corporation of India Limited (POWERGRID) and will include subprojects in various locations in India.
As an innovative feature, the project is designed to adopt the country systems on both safeguards and procurement at the agency level.
In addition to the ADB loan of USD 175 million, the project includes USD 50 million co-finance from the Clean Technology Fund (CTF).
This is a USD 5.8 billion component of the Climate Investment Funds, aimed at providing developing countries with resources to expand efforts in utilising low carbon technologies and transitioning to clean, renewable energy sources.
POWERGRID will make an equity contribution of USD 135 million to support the total project cost of $450 million.
The USD 175 million loan will be from ADB’s ordinary capital resources (OCR) and will have a 20-year term, and an annual interest rate will be applicable, determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility.
The USD 50 million CTF loan financing will come with a 40 year term.
The project will improve the capacity and efficiency of interstate transmission networks, particularly in transmitting the electricity generated from the new solar parks to the national grid.
Apart from the evacuation of 2,500 megawatts(MW) of power from solar parks in Bhadla, Rajasthan, and 700 MW from Banaskantha, Gujarat, POWERGRID is also including two additional subprojects that will increase solar power generation by 4.2 gigawatt and lessen carbon emissions by over 7 million tons every year.
POWERGRID would make an equity contribution of $135 million equivalent to support the total project cost of USD 450 million.
ADB: Know More- Headquarters : Mandaluyong, Metro Manila, Philippines
- Main organ : Board of Governors
- President : Takehiko Nakao
- Purpose : Social and economic development
