Under the agreement, ADB will provide $1bn of finance for additional power transmission network components, while AIIB will provide $150m to finance Green Energy Corridor and Grid Strengthening Project in the country.

ADB’s lending will include $500m of government-backed loan and a further $500m in non-sovereign lending to India’s national transmission company Power Grid Corp of India (POWERGRID).

ADB South Asia Department Energy Division Director Priyantha Wijayatunga said: “We are pleased that this first AIIB cofinanced project in India will bring clean energy to more people and help the country achieve its ambitious renewable energy targets. We look forward to broadening our partnership with AIIB in the coming years.”

The project will include 400kV transmission components in Tamil Nadu to connect at Pugalur with long distance systems financed by ADB. AIIB will provide a co-financing of $100m for this component, which has a total cost of $303.5m. The remaining amount will be financed by POWERGRID.

AIIB vice president and chief investment officer D.J. Pandian said: "To mobilize sufficient funds to address the huge infrastructure needs across Asia, multilateral development institutions must collaborate with each other and a range of other partners.

"We will continue to welcome opportunities to combine our investments and talent with other international financial institutions to drive positive economic outcomes for people in the region."

Image: ADB and AIIB to co-finance energy transmission project in India. Photo: Courtesy of Asian Development Bank.