Powergrid signs $400 mn loan agreement with ADBMarch 31st, 2008 - 7:55 pm ICT by admin
Mumbai, March 31 (IANS) The Power Grid Corp of India Ltd (Powergrid) has signed a loan agreement with the Manila-based Asian Development Bank (ADB) for $400 million, the firm said Monday. Powergrid chairman and managing director R.P. Singh and ADB, India Resident Mission country director Tadashi Kondo signed the 25-year term loan agreement Friday, a statement said here.
The loan is part of ADB’s newly introduced loan facility called Multitranche Financing Facility (MFF), based on time-sliced approach under which loan assistance can be availed in number of tranches depending upon funding requirement.
This, according to Powergrid, is a unique feature. A Framework Financing Agreement (FFA) for MFF had been signed with ADB for $600 million. The MFF loan will be drawn in two tranches, of which this loan of $400 million constitutes the first portion.
Powergrid, a central transmission utility under the aegis of the power ministry, has accorded high priority to the development of the power sector with an ambitious target of providing ‘Power to all by 2012′.
Towards this, the company has been tapping domestic markets and also been arranging funds from multilateral funding agencies.
The ADB loan will be utilised to finance part of the fund requirement of the company’s projects - Interconnector-I Project for the northeastern, northern and western regions and upgradation of transmission capacity from Uttarakhand Project.
The Interconnector-I Project will involve 1,800 km long 800 KV high voltage direct current lines and 6,000 MW bipole running lines from Biswanath Chariyali in Assam to Agra in western Uttar Pradesh.
This will help facilitate transmission of power from northeastern region and Sikkim/Bhutan to power deficit regions like northern and western regions.
The upgradation of transmission capacity involves transformation capacity addition of 5000 MVA, and will facilitate transmission of hydropower generated from Tehri valley to northern region constituents.
Prior to this, Powergrid has availed three huge loans worth $925 million for its various transmission projects.
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