The Asian Development Bank (ADB) has approved three loans, which sum up to $826 million, to India, for upgrading power transmission systems in the country.
ADB has granted two loans, one a $500 million sovereign-guaranteed loan and another, a $250 million non-sovereign corporate loan. Both the loans have been granted to the central transmission utility, Power Grid Corporation of India Limited (POWERGRID). The loan is the POWERGRID’s largest foreign commercial term borrowing, which doesn’t involve support of government credit. Both the loans will fund the construction of more than 1300km inter-regional transmission line. The inter-regional transmission line will facilitate transfer of bulk electricity from independent power producers in Chhattisgarh (a state in India), to areas of high demand in northern India, including the National Capital Territory Region of Delhi. The third loan is a sovereign-guaranteed $76 million loan, which will be used to connect the western grid region to the union territories of Daman and Diu and Dadra and Nagar Haveli. The non-sovereign loan has a maturity period of up to 15 years, while the sovereign-guaranteed loan has a maturity 25-year term, including a five-year grace period. The loan carries an interest rate determined in accordance with ADB’s LIBOR-based lending facility.