India and the ADB today signed a USD 500 million loan pact to expand inter-regional power connectivity in the country, and strengthen transmission system to accommodate renewable energy-generation capacity.
"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," Deputy Country Director of ADB's India Resident Mission Leonardus Boenawan Sondjaja said after signing the agreement.
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, the multilateral lending agency said in a statement.
It will also help Power Grid Corporation of India (Powergrid) add 6,000 MVA transmission capacity between Raigarh in Chhattisgarh and Pugalur in Tamil Nadu; 2,000 MVA transmission capacity between Pugalur in Tamil Nadu and North Trichur in Kerala and 3,000 MVA transmission capacity to accommodate renewable energy flows via Bikaner in Rajasthan, the statement added.
According to the statement, USD 500 million loan from ADB's ordinary capital resources will make up around 19 per cent of the USD 2.581 billion total project cost, with Powergrid providing counterpart financing of USD 2.081 billion.
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.
Asian Development Bank (ADB), based in Manila, was established in 1966.
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