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India's power grid expansion secures financing

Last Updated April 11, 2008

India's national power grid operator has won a US$600mn loan to support its plan to expand the country's power transmission grid.

The Asian Development Bank (ADB) is providing the multi-tranche financing facility to India’s Powergrid. It will support the construction of a high-voltage power transmission system to transmit hydropower generated in the northern and northeast regions of India to areas of high demand in the west, and within some northern regions.

Totals costs of the project are estimated at US$2.54bn. ADB is also expecting to extend a further US$400mn loan to the project, pending approval.

Powergrid will invest US$762mn and raise the remaining balance via other financial institutions.

In order to meet the Indian government’s plans to reach an economic growth target of 9% per year, electricity consumption will rise by 8% every year. However, access to electricity is still low. Only 44% of total households and 33% of households in rural areas have access to electricity. Except for the eastern and northeastern regions, the rest of the country faces power shortages in the range of 300 to 6,000MW.



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