The Asian Development Bank (ADB), with co-financing from Asian Infrastructure Investment Bank (AIIB), will provide $150m in an ongoing power transmission project in India, with an aim to deliver more clean energy.
AIIB says that the project is being carried out to enhance energy connectivity in the country by strengthening its electricity transmission system.
The new funding from the partners will be used for additional power transmission network components that will connect with the ADB-financed Green Energy Corridor and Grid Strengthening Project.
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."
According to the Manila-based ADB, the clean energy project will be expanded further to increase energy transmission to cover more states in the country.
The project will include 400kv transmission components in the southern state of Tamil Nadu to connect at Pugalur with the long-distance grid systems funded by ADB.
The development bank will deliver $50m, while AIIB will be cofinancing $100m for the component, which will be built at a cost of $303.5m. India’s state-owned transmission company Power Grid will fund the remainder.
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.”
In December 2015, ADB’s board of directors approved a couple of loans intended to back the Green Energy Corridor initiative of the Indian government.
As part of the initiative, the inter-regional grid systems between the western and southern regions are to be built and upgraded. The project will also see addition of high voltage transmission lines and substations in the northern part of the country.
India’s new grid system will mainly transmit solar and wind power, aimed at covering more locations.
The ADB financing for this project comprises a $500m loan backed by the government, along with an additional $500m in nonsovereign lending to Power Grid.
Image: The AIIB cofinanced project will bring clean energy to more people and help India achieve its renewable energy targets. Photo: courtesy of Asian Development Bank.