The Asian Development Bank is to provide US$500 million for the construction of a power transmission system to link solar and wind plants in Rajasthan, India, to local and national grids.
The new power transmission system will involve about 1,850km of transmission lines, mostly in western Rajasthan, three new 400kV substations and nine new 220kV grid substations.
“Boosting renewable energy is important for Rajasthan and India to meet fast-growing energy needs in a way that is kind to the environment while also improving the country’s energy security by reducing reliance on imported fossil fuels,” said Len George, energy specialist in ADB’s South Asia department.
“The proposed transmission investments will also support evacuation of energy produced in large renewable energy parks that bring in economies of scale compared to smaller stand-alone renewable energy projects.”
Rajasthan, India’s second largest PV state after Gujarat, has set out ambitious plans for additional renewable energy capacity, including proposals earlier this week for what would be the world’s largest PV plant.
Overall the state is targeting 8GW of new solar and wind capacity by 2018, and the new transmission system will allow these projects to connect to India’s grid system.
One of the early beneficiaries of the transmission system will be the 75MW Bhadla solar park being built by Rajasthan Renewable Energy Corporation, the state’s renewable energy agency.
The funds comprise a US$498 million multi-tranche financing facility from the World’s Banks Clean Technology Fund, and a further US$2 million in technical assistance grant to finance infrastructure planning for the Bhadla park.
The government of Rajasthan and state transmission utilities will provide counterpart financing of about $300 million.
A further US$220 million is expected to be released by ADB in 2014 and a final loan of around US$128 million expected to be made in 2015.