The ADB will offer USD 175 million loan to support construction of high voltage transmission systems to evacuate power from new mega solar parks to the inter-state grid and improve reliability of the national grid.
The Manila-headquartered Asian Development Bank (ADB) and the government today signed an agreement to this effect.
"The loan will be given to the Power Grid Corporation and will include sub-projects in various locations in India," the multilateral organisation said in a statement.
As an innovative feature, the project is designed to adopt the country's systems on both safeguards and procurement at the agency level.
"By supporting the construction of inter-state transmission systems for the mega solar power projects, the project will provide a means of exporting excess solar energy from states with surplus power to power-deficit states and those seeking to meet their renewable purchase obligation requirements," said Raj Kumar, Joint Secretary, Finance Ministry, after signing the pact.
ADB Country Director Kenichi Yokoyama said the project will support the continued expansion of solar energy in India in line with the government's objectives.
In addition to the ADB loan of USD 175 million, the project includes USD 50 million co-finance from the Clean Technology Fund (CTF), part of a USD 5.8 billion component of the Climate Investment Funds aimed at providing developing countries resources.
PowerGrid will make an equity contribution of USD 135 million equivalent to support the total project cost of USD 450 million.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)