ADB sanctions $400 mn loan for PowerGrid projects

Power Grid Corporation of India today signed an agreement with the Asian Development Bank (ADB) to avail a $400 million loan for funding its transmission projects during 2005-09 which includes transmission elements of the national power grid.

The loan comes with a 20-year term with a grace period of five years. The loan will facilitate the distribution of 2,500 mega watt (Mw) to Andhra Pradesh, Tamil Nadu, Karnataka, Kerala and Pondicherry.

The planned generation capacity addition of the southern region includes Kudankulam atomic power plant's output of 2000 Mw and Neyveli Lignite power plant's output of 500 Mw. Both the plants are located in Tamil Nadu.

This loan is being availed to achieve the company's aim of providing power to all by 2012. To meet this ambitious target, the company has not restricted itself to tapping domestic markets, but has also been targeting multilateral funding agencies.

"We have geared up to award contracts for projects valuing about $300 million progressively in the next three months out of a total loan of $400 million," said RP Singh, chairman and managing director, Power Grid.

This is the third loan that Power Grid is availing from the ADB. The earlier loan were for $275 million and $250 million.

Power Grid achieved a turnover of Rs 2,788 crore (provisional) and net profit of Rs 725 crore (provisional) for 2004-05. Gross asset base of the company has grown to Rs 21,553 crore (provisional) in 2004-05.