India, on Friday, inked three loan agreements worth $826 million with the Asian Development Bank (ADB) to shore up the country's power transmission systems for efficient transfer of electricity from surplus regions to deficit regions.
According to an official statement here, a $500-million sovereign-guaranteed loan along with a $250-million non-sovereign corporate loan will help establish a more than 1,300-kilometre inter-regional transmission link to allow bulk transfer of electricity from independent power producers in Chhattisgarh to high power demand areas in the north, including the National Capital Territory (NCR) region of Delhi.
The third agreement for a sovereign loan of $76 million is aimed at connecting the western power grid to the Union Territories of Daman & Diu and Dadra & Nagar Haveli.
The tripartite agreements were signed by DEA (Department of Economic Affairs) Joint Secretary (Multilateral institutions) Venu Rajamony on behalf of the Union Government and ADB's Principal Economist (India resident mission) Rana Hasan on behalf of the Manila-based lending agency and PowerGrid Chairman & Managing Director R. N. Nayak.
According to Mr. Rajamony, this is a pioneering initiative to club a non-sovereign loan of $250 million with a sovereign loan of $500 million in one financing package. The combined loan, he said, would significantly strengthen PowerGrid's corporate credit capabilities and access to future foreign commercial borrowings in the international capital market and also set a benchmark for future commercial lending to all Central public sector undertakings (CPSUs).
KfW loan for REC
Another agreement under the umbrella of Indo-German bilateral development cooperation programme was signed between Rural Electrification Corporation (REC) and KfW (German Development Bank) for a loan of euro 100.1 million, including a grant component of Euro 0.5 million, for financing ‘Clean energy for rural development' projects.
The loan agreement was inked by REC Chairman and Managing Director Rajeev Sharma and KfW Country Director (India) Oscar von Maltzan while the government was represented by DEA Joint Secretary Prabodh Saxena. The loan component is aimed at supporting such projects in the field of renewable energy and energy efficiency which contribute to rural development.
