1 October, 2011
The Asian Development Bank (ADB) will invest $750 million for power transmission systems that will help India efficiently transfer electricity to regions.The ADB Board of Directors has approved loan financing for the national grid improvement project which will allow the bulk transfer of electricity (3,000 MW) from independent power producers in Chhattisgarh, to areas of high demand in the north, including the national capital territory of Delhi. It will be done through the establishment of a 1,300-km interregional transmission link using 800-kV high voltage direct current (HVDC) technology, a key driver of smart grid development. The funds will be made available to the Indian government-owned transmission utility, POWERGRID.To develop the national grid, POWERGRID plans to invest about $22 billion to more than double the size of its transmission network between now and 2017, thus expanding its funding base from the present sources of domestic bonds and government-guaranteed loans to new foreign commercial borrowing. While the existing interregional transmission capacity stands at 22,400 MW, the Government targets to increase this capacity to 27,950 MW by 2012, growing to 57,000 MW by 2015, and 75,000 MW by 2017 under the 12th Five Year Plan. Such interregional transmission strengthening will create a backbone to sustain open power supply and investment in both generation and distribution.ADB’s funding consists of a $500 million sovereign-guaranteed loan and a $250 million non-sovereign corporate loan. This novel financial structure will provide an anchor transaction in the total project cost of $2.25 billion. The project is due for completion in 2017.