Government inks $105 million loan agreement with ADB for Hydropower Transmission in Himachal Pradesh

Union Government and Asian Development Bank (ADB) have signed $105 million loan to continue financing transmission system upgrades in Himachal Pradesh for increased supply of hydropower to state and national grid. It is third tranche part of $350 million multi-tranche financing facility (MFF) for Himachal Pradesh Clean Energy Transmission Investment Program approved by ADB Board in September 2011. The loan will have 25-year term, including grace period of 5 years, an annual interest rate determined in accordance with ADB’s lending facility based on London interbank offered rate (LIBOR) and commitment charge of 0.15% per year.

Himachal Pradesh Clean Energy Transmission Investment Program

The program is aimed at developing and expanding transmission network to evacuate clean and renewable power generated from State’s hydropower sources to load centers within and outside State. It also supports institutional capacity development of state transmission utility, Himachal Pradesh Power Transmission Corporation Limited (HPPTCL), as the executing agency for this project.

Significance of loan

It will help Government of Himachal Pradesh to benefit electricity consumers in state and throughout northern India, by increasing transmission system capacity for inflow of hydropower generated in state into India’s national grid. It will help sustain confidence among existing and potential hydropower developers about availability of sufficient transmission capacity for evacuation of power from hydropower generation sources in Himachal Pradesh.
 
 

Month: Current Affairs - November, 2018