State-owned transmission firm Power Grid Corporation of India Limited (PGCIL) has sought loan assistance of US$1 billion from the Asian Development Bank (ADB), according to energy and mines minister Piyush Goyal.
The loan will include a US$500 million sovereign guaranteed loan and a non-soveriegn loan for the other US$500 million.
It will be used to fund several transmission projects over the next three or four years, including a Green Energy Corridor poject. The Corridors are for transmiting power from solar rich states to those with high energy demand. They will also help integration of renewables into the grid and increase their share.
The loan will be used for Inter State Transmission Systems (ISTS). These include 765kV DC connections between Ajmer and Bikaner in Rajasthan and another connection between Bikaner and Moga. The fund will also be used for establishing a 2×1500 MVA, 765/400 kV substation at Bikaner and for work on a circuit in Bikaner.
In May Goyal said that Inter-State Transmission Projects are expected to be funded with 30% equity from PGCIL.
The loans will also be used for two major links between the states of Chhattisgarh, Tamil Nadu and Kerala.
Grid issues are expected to hamper India's solar plans in the coming two years as green energy corridor projects can take up to five years to complete, while solar takes just 12-18 months.