Of the total funding, $500m will be offered in the form of government-backed loan and the remaining $500m in nonsovereign lending.
Powergrid will use the funding to construct and upgrade high voltage transmission lines and substations in the states of Rajasthan and Punjab, as part of the Indian government’s Green Energy Corridor initiative.
New high-voltage direct current terminals will also be built in Chhattisgarh, Tamil Nadu, and Kerala to increase interconnectivity between the regions to 16GW from 10GW.
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 needs more than $3.4bn in funding for the interstate Green Energy Corridor program.
The project may further require an additional financing of around $10bn for expansion in the future to achieve large power transfers and power sector optimization.
ADB private sector operations department director general Todd Freeland said: "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."
India is planning to generate 175GW of renewable energy capacity by 2022.
The country is promoting the increased use of renewable energy to meet growing power demand, provide universal electricity access, and increase energy self-sufficiency.
In October, the ADB and India signed a $200m loan agreement for renewable energy subprojects in the country.
Image: ADB’s financial assistance will help improve transmission links, delivering clean power to more people. Photo: courtesy of pakorn / FreeDigitalPhotos.net.
