The Hindu Business Line : PowerGrid gets $600 m loan from World Bank

New Delhi, March 19 Transmission major Power Grid Corporation of India Ltd (PGCIL) has bagged a $600 million loan from the World Bank to strengthen its electricity transmission system. Announcing the loan, which is backed by a Government of India guarantee, the Bank said in a statement that the Fourth Power System Development Project (PSDP IV) would aim to reduce transmission losses and cut the cost of energy through further investments in the utility’s systems.

The project is part of the Bank’s long-term partnership with PGCIL, initiated when the firm was formed in 1989, and would finance the strengthening of five transmission schemes — East-West Transmission Corridor, Western Region System Strengthening Scheme II, Eastern Region System Strengthening Scheme I, Balia-Bhiwadi HVDC Bipole System, and North-West Transmission Corridor. The loan has a 20-year maturity, which includes a 5-year grace period.

“Despite a booming economy, India’s growth potential is constrained by inadequate electricity services and limited power generation and supply infrastructure... The power sector has improved in recent years, albeit in an environment where demand for electricity continues to outstrip supply,” the Bank said. The World Bank has made three direct loans to PGCIL since 1993. During this period, the company has nearly tripled its transmission network, its assets have grown more than eight-fold to $7.3 billion and revenues have increased more than six times to over $1 billion, it said in a statement.

“India’s policy reforms in the power sector are beginning to pay off,” World Bank Country Director (India) Ms Isabel Guerrero, said. “The sector’s financial performance is improving and more and more villages are being electrified... This project, by strengthening transmission networks within and between regions, will enable more power to reach the people across the country.”

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