The project will also include new high-voltage direct current terminals in Chhattisgarh, Tamil Nadu and Kerala

December 11, 2015

The Asian Development Bank (ADB) recently said it will lend USD 1 billion to transmission utility Power Grid Corp. of India to build and upgrade high-voltage transmission lines and sub-stations in Rajasthan and Punjab, as part of the government’s Green Energy Corridor initiative.

Green Energy corridors initiative refers to setting up of transmission corridors to supply renewable power to the national grid. “ADB is to provide a USD 500 million government-backed loan and a further USD 500 million in non-sovereign lending,” said an official statement.

The project will also include new high-voltage direct current terminals in Chhattisgarh, Tamil Nadu and Kerala, boosting interconnectivity between the regions from about 10 gigawatts (GW) to 16 GW.

India has announced ambitious plans to achieve a national renewable energy target of 175 GW by 2022 and nearly 90% of this is expected to be generated from solar and wind sources which are concentrated in a few Indian states.

Power Grid’s funding needs for the interstate Green Energy Corridor exceeds USD 3.4 billion, while enhanced overall inter-regional connectivity—critical not just for renewable energy but for large power transfers and power sector optimization—will require a further USD 10 billion. In order to fund significant expansion plans and maintain affordability for consumers, companies like Power Grid need to access all available and competitive sources.

ADB, based in Manila, was established in 1966. It is owned by 67 members and in 2014 ADB assistance totaled USD 22.9 billion, including co-financing of USD 9.2 billion.