A $500m government-backed loan and a further $500m in non-sovereign lending will be used by India’s national transmission company for work in Rajasthan and Punjab as part of the Indian government’s Green Energy Corridor initiative.
Power Grid Corporation of India will also spend the money on new high-voltage direct current terminals in Chhattisgarh, Tamil Nadu, and Kerala states.
Earlier this year, India announced ambitious plans to achieve a national renewable energy target of 175 GW by 2022. About 90 per cent of this is expected to be generated from solar and wind sources which are concentrated in a few Indian states. Investment in efficient, inter-state transmission infrastructure that can address the intermittency and timing differences of renewable energy is therefore critical in supporting expansion and optimal use of renewable energy in India.
Hun Kim, Director General of the Asian Development Bank’s South Asia Department, said: “The new transmission lines connecting renewable energy-rich areas to the national grid will enhance connectivity between the regions by bringing clean energy to more people, making the overall Indian power system more efficient, and improving India’s overall energy security.”
The bank’s funding is a welcome boost for POWERGRID, which needs more than $3.4bn to fulfil the Green Energy Corridor project.
Todd Freeland, director general of the bank’s Private Sector Operations Department, said that the combination of sovereign-backed and private sector loans “is an innovative financing solution that provides POWERGRID with a large, competitive and efficient source of funding”.
The Manila-based bank has also provided a $130m project loan to help the Chinese city of Qingdao utilize low carbon power for its energy needs.
The bank’s senior energy specialist Teruhisa Oi said that Qingdao has “large power needs for heating in the cold winter months, suffers from poor air quality because of its heavy reliance on coal-fired energy generation, and it is committed to sharply scale back its use of fossil fuels”.
Oi said that the bank’s loan “will help the city adopt a non-coal based energy system and low-temperature heat distribution network that will help lower energy intensity by 40 per cent and carbon intensity by 64 per cent from the averages seen in systems in other parts of the northern Peoples’ Republic of China”.
Instead of coal, Qingdao will use natural gas, solar, thermal, shallow ground geothermal and waste heat recovered from industrial plants to power its district heating, cooling and power production and distribution systems. The project will install small natural gas boilers, a waste heat recovery system from sewage plants and industries, heat pump systems, a solar heating system, a heat storage system and low-temperature pipelines in eight locations across the city.