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Wednesday, October 5, 2011

ADB provides $759 million loans for Smart Grid development in India

The Asian Development Bank will invest $750 million in India for Smart Grid development. The project will enable bulk transfer of 3,000 MW of electricity from independent power producers of Chhatisgarh state to the areas of north India, including national capitol region Delhi, where the demand is high.  For this, 1300 km inter-regional transmission line will be established using 800 KV High Voltage Direct Current (HVDC) line, which is key driver for Smart Grid development. 

"Strengthening the inter-regional HVDC transmission network will promote open access to power supply, increase investment in both generation and distribution, help integrate the electricity market and encourage power trading and competitive electricity prices," said Kaoru Ogino, Senior Energy Specialist in ADB's South Asia Department. 

The ADB funds will be available to Government owned PowerGrid Corporation India Ltd (PGCIL), which is India's largest power transmission and distribution company. PowerGrid plans to invest $22 by 2017 to double its transmission network. The energy infrastructure is unable to match India's growing energy demands, according to 2010 data, in India there is 12% peak power shortage. Some state are able generate more power,however due to lack of inter-regional transmission link are unable to move electricity to power deficient regions. ADB is going to provide $500 million as sovereign-guaranteed  loans and $ 250 million as non-sovereign corporate loans. The total project cost is $2.25 billion and is expected to be completed by 2017. 

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