ADB
November 29, 2019 at 9:38 am | Latest Finance News

ADB, India sign $451 million loan to strengthen Power Connectivity

New Delhi: The Asian Development Bank (ADB) and the Government of India today signed a $451 million loan to strengthen power connectivity between the southern and northern parts of the Chennai–Kanyakumari Industrial Corridor (CKIC), which is part of the East Coast Economic Corridor (ECEC), in Tamil Nadu. ADB is the lead partner of the Government of India for developing ECEC.

The signatories to the loan agreement were Mr Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs in India’s Ministry of Finance, and Mr Kenichi Yokoyama, Country Director of ADB’s India Resident Mission.

“The project will help Government of Tamil Nadu meet the increasing demand for power supply from industry and commercial enterprises in the State through transfer of power from new generation facilities, including renewable energy, in the southern CKIC to the industrial hubs in the state’s northern region,” said Mr. Khare after signing the loan agreement.

“The project will provide an impetus to the industrial development of CKIC, which ADB has been assisting through strategic planning and investments in infrastructure while facilitating industrial investments. They are expected to enhance industrial competitiveness while creating well-paid jobs to support the state’s rapid economic transformation,” said Mr Yokoyama.

The state government has identified quality infrastructure including a reliable power supply as a key prerequisite for its further economic development. The state is aiming to develop the northern Chennai–Tiruchirappalli area of CKIC as a manufacturing centre while targeting the relatively poor southern Madurai–Thoothukudi portion for the development of renewable energy-based power generation because of the availability of wind and solar resources.

The project will help establish extra-high-voltage transmission link between Virudhunagar and Coimbatore to transfer the additional generation capacity of 9,000 megawatts (MW), including 6,000 MW from renewables, by 2025 to meet the increased power demand in the CKIC.

This will help reliably evacuate power from these new power plants in the southern CKIC. The project will also build the operational capacity of TANTRANSCO, the state-owned company responsible for transmission, by supporting a financial restructuring plan, better facilities and work environment for women workers, and improved monitoring system for social and environmental impacts. To support this end, ADB has approved a complimentary technical assistance grant of $650,000.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.

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