NEW DELHI: Manila-based Asian Development Bank (ADB) and India signed an agreement on Thursday under which the latter will receive $500 million loan to improve large-scale power transmission from the northern to the southern regions. The pact also envisages integrating renewable energy in the country’s power system.
“Expansion of inter-regional connectivity enables bulk power transfer to the southern region which has, at times, been affected by power shortages. This loan will also help strengthen the transmission system to accommodate renewable energy-generation capacity,” said Leonardus Boenawan Sondjaja, deputy country director of ADB’s India Resident Mission after signing the agreement.
The ADB loan will make up for 19 per cent of the $2.58-billion total project cost, while Power Grid Corporation will provide $2.08 billion.
The loan has a 20-year term, including a five-year grace period.
The project, which is expected to be completed by December 2020, will help build 800 kilovolt (kV) and 320 kV high voltage direct current (HVDC) converter stations and 765 kV power transmission systems in India.
It will also help Power Grid add 6,000 MVA of power transmission capacity between Raigarh in Chhattisgarh and Pugalur in Tamil Nadu, 2,000 MVA transmission capacities between Pugalur in Tamil Nadu and North Trichur in Kerala, and 3,000 MVA transmission capacities to accommodate renewable energy flows via Bikaner in Rajasthan, the multi-lateral agency said in a statement.
The loan has a 20-year term, including a five-year grace period with an annual interest rate determined in accordance with ADB’s LIBOR-based lending facility, it said.