The project will enable the bulk transfer of 3,000 MW of electricity generated from independent power producers in the state of Chhattisgarh, to areas of high demand in north India, including Delhi.
Under the project, a 1,300 km interregional transmission link using 800 kV high voltage direct current (HVDC) technology will be built.
India based state-owned transmission utility, Powergrid will provide funding towards the project and will invest $22bn to double the capacity of its transmission network by 2017.
ADB South Asia Department Senior Energy Specialist Kaoru Ogino said strengthening the interregional HVDC transmission network will promote open access to power supply, increase investment in both generation and distribution.