The Asian Development Bank (ADB) has agreed to provide up to $300 million for financing projects in the power sector in Uttaranchal, an official statement said on Saturday.
ADB noted that Uttaranchal had undeveloped hydropower potential estimated at 20,000 MW.
"Harnessing this capacity will meet the state's needs for clean and efficient energy" and allow it to export power to other states and generate funds to support investment in rural areas, it said.
The bank said an estimated $12 billion in investments were needed over the next 12 years to harness the state's power sector potential.
"While the support represents a relatively small share of the total funding needs, ADB's presence as a partner brings down the total cost of funds and helps attract other long-term financiers to the sector," said senior energy specialist Dan Millison.
Investments to be supported by the ADB's financing facility include the construction of small hydropower plants and expansion of transmission system.