ADB extends $750M loan to promote smart electricity transfer in India

ADB will invest $750 million for power transmission systems that will help India efficiently transfer electricity to regions where the need is greatest.

The ADB Board of Directors has approved loan financing for the national grid improvement project which will allow the bulk transfer of 3,000 MW from independent power producers in the western state of 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 technology, a key driver of smart grid development.

The funds will be made available to the Indian government-owned transmission utility, POWERGRID.

"Strengthening the interregional HVDC transmission network will promote open access to power supply, increase investment in both generation and distribution, help integrate the electricity market and encourage power trading and competitive electricity prices," said Kaoru Ogino, Senior Energy Specialist in ADB's South Asia Department.

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.

The project is due for completion in 2017.