ADB clears $350 million funding for 2 projects in India

Asian Development Bank has made financial commitment of $350 million in loan and equity investment for two energy projects in India.

"The ADB has approved a multi-tranche loan facility of $300 million to help India's Assam state continue its drive to eliminate power sector inefficiencies that are hurting consumers and the economy," the multilateral lending agency said in release today.

In an equity investment of $50 million in a renewable energy company ReNew Power Ventures Private Ltd, it would help India meet clean energy targets.

"The ADB has made an equity investment of $50 million in a leading Indian renewable energy company ReNew Power Ventures Private Limited, underscoring ADB's commitment to help India meet its clean energy targets," it said in a separate release.

The three tranches $300 million loan facility will fund generation and distribution upgrades as well as contribution of a 120-megawatt hydro power plant.

It will finance new energy efficient generating equipment at existing plants, new distribution lines and substations, and financial management training and other support for staff of the state power companies, Assam Power Generation Corporation and Assam Power Distribution Company.

"More than a third of households in the state face daily electricity cuts of 5 to 6 hours, many important businesses, such as the tea gardens, still aren't connected to the grid, and in peak periods Assam has to buy up to 15 per cent of its power from independent producers at very high cost," said Herath Gunatilake, Lead Energy Specialist with ADB's South Asia Department.

"By funding measures to cut load shedding, the loan is expected to benefit over 2.7 million consumers," he added.

About the equity investment of $50 million in ReNew Power, ADB said the funds will help finance company's growing pipeline of wind power projects at various stages of development across India, with a total capacity of 1,000 megawatts.