ADB signs $175 mln loan pact with govt to help improve solar transmission system
Asian Development Bank has signed a $175 million loan agreement with the government to support construction of high voltage transmission systems for evacuation of power generated from new mega solar parks to the interstate grid, and improve the reliability of the national grid system here.
“The loan will be given to the Power Grid Corporation of India Ltd and will include subprojects in various locations in India. As an innovative feature, the project is designed to adopt the country systems on both safeguards and procurement at the agency level. This will be the ADB’s first breakthrough of the country system’s application to a specific project,” an official release said.
In addition to the ADB loan of $175 million, the project includes $50 million co-finance from the Clean Technology Fund (CTF) – a $5.8 billion component of the Climate Investment Funds aimed at providing developing countries resources to expand efforts in utilising low carbon technologies and transitioning to clean, renewable energy sources.
Power Grid will make an equity contribution of $135 million equivalent to support the total project cost of $450 million. The $175 million loan will be from ADB’s ordinary capital resources (OCR) and will have a 20-year term, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility. The $50 million CTF loan financing will come with a 40-year term.