The Asian Development Bank (ADB) has granted $1bn in financing to India’s national transmission company Power Grid Corporation of India (Powergrid) to fund for renewable energy transmission and grid expansion projects.
The funds, which include $500m government-backed loan and a further $500m in nonsovereign lending, will be used by the firm to build and upgrade high voltage transmission lines and substations in Rajasthan and Punjab states.
ADB private sector operations department director general Todd Freeland said: "The combination of ADB’s sovereign-backed and private sector loans is an innovative financing solution that provides POWERGRID with a large, competitive and efficient source of funding."
"Investment in India’s transmission infrastructure complements ADB’s assistance to other private sector energy projects by creating capacity for significant new energy generation, expanding opportunities for power trading, and generally improving the bankability of the renewables market."
The funding will support the Indian Government’s Green Energy Corridor initiative, which aims to facilitate the power transfer from the renewable energy rich areas to other parts of the country.
Green Energy Corridor initiative has been launched to deliver electricity from country’s west to southern region.
ADB South Asia Department director general Hun Kim said: "The new transmission lines connecting renewable energy-rich areas to the national grid will enhance connectivity between the regions by bringing clean energy to more people, making the overall Indian power system more efficient, and improving India’s overall energy security."
PowerGrid will also use the funding to build new high-voltage direct current terminals in Chhattisgarh, Tamil Nadu, and Kerala states.
The terminals are expected to boost interconnectivity between the regions from about 10GW to 16GW while increasing energy delivery from India’s west to southern region.
In an effort to increase renewable energy use to meet growing power demand, India has set a target to have installed renewable energy capacity of 175GW by 2022.
The country also aims to provide universal electricity access and increase energy self-sufficiency.
Image: India plans to have 175GW of installed renewable energy capacity by 2022. Photo: courtesy of dan/ FreeDigitalPhotos.net.