ADB to give $150 mn for renewable energy development in Rajasthan

NEW DELHI: Asian Development Bank will provide loans totalling $150 million to help create infrastructure for renewable energy development in Rajasthan.

"The Asian Development Bank (ADB) and the government today signed two loans totalling $150 million to help build transmission lines that will support renewable energy development in the state of Rajasthan," ADB said in a release.

The $150 million loans are the first tranche of the $500 million Rajasthan Renewable Energy Transmission Investment Program approved by ADB in 2013.

The loans will finance high-voltage transmission lines and sub-stations to be built by Rajasthan Rajya Vidyut Prasaran Nigam Limited ( RRVPNL).

"The transmission investment program will spur the development of renewable energy in the resource-rich areas of Western Rajasthan and help to deliver more environmentally friendly energy to the state and national grids," said M Teresa Kho, Country Director of ADB's India Resident Mission.

Of the loan approved, $88 million comes from ADB's Clean Technology Fund (CTF) and $62 million from its ordinary capital resources (OCR).

The CTF component is a highly concessional loan with a 40-year term and grace period of ten years at an annual interest of 0.25 per cent.

The OCR component has a 25-year term with a grace period of five years and annual interest in accordance with ADB's LIBOR-based lending facility.

Rajasthan government will provide about $127 million to cover the balance of costs in first tranche of the project.

Projects under first tranche of loan are expected to be completed by December 2016.

Additionally, CTF will also provide USD 2 million grant to finance technical studies and capacity building for RRVPNL and the Rajasthan Renewable Energy Corporation (RREC).