The Bank is to loan US$400M to the Power Grid Corporation of India. It said the funds are required to help increase the reliability of power exchange between regions and states.
The funds are additional under the Fourth Power System Development Project (PSDP IV), which was approved earlier this year. Then, the Bank, approved a loan of US$600M to initiate the scheme.
The Bank’s funding for the scheme was followed shortly after by approval of a loan by the Asia Development Bank (ADB).
PSDP IV aids hydro power development and is a strategic disincentive to building thermal plants near cities. It will also improve the cost effectiveness of energy transfer.
The loans are guaranteed by the Government of India. The grid company has obtained previous loans from the Bank, helping it to almost triple the size of its network over the last 15 years.
