Uttaranchal power gets $300 mn loan
Asian Development Bank has approved a $300 million loan to Uttaranchal to strengthen and expand its power sector.
"A project for assisting Uttaranchal government in the power sector was approved. Out of the $300 million (about 1,320 crore), $250 million approved for transmission, $45 million for generation (mini hydel) and $5 million for reforms related capacity building," Ashok Saikia, Executive Director in the ADB's Board said.
Linked with the project will be reforms in the power sector, cost recovery, private sector development, improved efficiency of power facilities, Saikia said.
The amount will be in the form of an innovative new 7-year financing facility, from which individual loans will be taken out for specific projects under the Uttaranchal government's comprehensive power sector roadmap.
According to ADB estimate, Uttaranchal has undeveloped hydropower potential estimated at 20,000 megawatts.
Harnessing this capacity will meet the state's needs for clean and efficient energy and allow it to export power to surrounding states, generating funds for the state.
To realise its potential, the state's energy sector requires about $12 billion over the next 12 years.
About $5 billion would be needed over the next six years to fund projects to increase power generation and improve transmission and distribution, as well as for policy reform and efforts to improve financial management.
"ADB's presence as a partner brings down the total cost of funds and helps attract other long-term financiers to the sector," ADB Senior Energy Specialist Dan Millison said.