Power Grid to increase lines by 11%

India's biggest electricity transmission company, Power Grid Corporation, plans to extend its power-lines network in the country by 11 per cent this fiscal year as part of targeted spending of Rs 8,500 crore ($2.1 billion).

State-run Power Grid wants to add 8,000 kilometres of lines to its existing network of 70,000 kilometres by March 2009, Chairman R P Singh said at the Asia Power and Energy Conference in Singapore today.

The company plans to raise Rs 4,500 crore via bonds and loans, Singh said. Power Grid signed an agreement to borrow $400 million from the Asian Development Bank (ADB) on March 31. The company also raised $600 million through a World Bank loan on March 19.

India is seeking investments of almost $200 billion to generate, transmit and distribute electricity and plug a widening shortfall.

The finance ministry estimates show that India loses 2 percentage points from annual economic growth each year because of inadequate power and transportation networks.

Power Grid plans to raise its annual spending by one-third from Rs 6,570 crore in the fiscal year ended March 31, Singh said.

Funding for Indian infrastructure projects will be unaffected by sub-prime problems in the US, Singh said.

The company plans to borrow about $3.6 billion overseas this year to grow its network, he said on January 8.

The company is working on a funding plan before it issues contracts to build a network connecting India's North-East, which has a surplus of electricity, to northern regions where there is strong demand, Singh said.

The project will allow the transfer of 6,000 Mw from Arunachal Pradesh and Sikkim to the northern city of Agra for further distribution ahead of the 2010 Commonwealth Games in New Delhi.