The Asian Development Bank (ADB) on Thursday said it would lend $1 billion to state-run Power Grid Corporation for expanding its transmission capacity in the country.
“ADB is to provide a $500 million government-backed loan and a further $500 million in non-sovereign lending to India’s national transmission company, Power Grid Corporation of India Ltd,” ADB said in a statement here.
“The new transmission lines connecting renewable energy-rich areas to the national grid will enhance connectivity between the regions by bringing clean energy to more people, making the overall Indian power system more efficient, and improving India’s overall energy security,” Hun Kim, Director General of ADB’s South Asia Department, was quoted as saying.
The loans will fund building and upgrading high voltage transmission lines and substations in Rajasthan and Punjab, as part of government’s Green Energy Corridor initiative.
“To increase energy delivery from India’s west to southern region, the project will also include new high-voltage direct current terminals in Chhattisgarh, Tamil Nadu, and Kerala states, boosting interconnectivity between the regions,” the statement said.
The government has announced a national renewable energy target of 175 GW by 2022, while PowerGrid’s funding needs for the interstate Green Energy Corridor are estimated at $3.5 billion.
“The combination of ADB’s sovereign-backed and private sector loans is an innovative financing solution that provides PowerGrid with a large, competitive and efficient source of funding,” Todd Freeland, director general of ADB Private Sector Operations, was quoted as saying.