The Asian Development Bank has agreed to give $150-million loan to the Government of India to help build transmission lines for renewable energy in Rajasthan.
The Government of India and ADB have signed two loan agreements. The loans form the first tranche of the $500-million Rajasthan Renewable Energy Transmission Investment Program approved by ADB in 2013.
The loans will be used to finance high-voltage transmission lines and sub-stations to be built by Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RRVPNL).
“The transmission investment programme will spur the development of renewable energy in the resource-rich areas of Western Rajasthan and help to deliver more environmentally-friendly energy to the state and national grids,” said M Teresa Kho, Country Director of ADB’s India Resident Mission, who signed the loan agreement, on behalf of ADB.
The $150-million first tranche is funded from two sources – $88 million from ADB’s Clean Technology Fund (CTF) and $62 million from ADB’s Ordinary Capital Resources (OCR).
The CTF component, a highly concessional loan, has a 40-year term, with a grace period of ten years, and an annual interest rate of 0.25 per cent.
The OCR component has a 25-year term, with a grace period of five years, and annual interest set in accordance with ADB’s LIBOR-based lending facility.
The State Government will provide counterpart financing of about $127 million to cover the balance of the costs of activities conducted under the first tranche. Projects under the first loan are due to be completed by December 2016.