Manila, Philippines (BBN)– The Asian Development Bank (ADB) will invest $750 million for power transmission systems that will help India efficiently transfer electricity to regions where the need is greatest, spurring growth and poverty reduction.

The ADB Board of Directors has approved loan financing for the national grid improvement project which will allow the bulk transfer of electricity (3,000 MW) from independent power producers in the western state of Chhattisgarh, to areas of high demand in the north, including the national capital territory of Delhi.

 It will be done through the establishment of a 1,300 km interregional transmission link using 800 kV high voltage direct current (HVDC) technology, a key driver of smart grid development. The funds will be made available to the Indian government-owned transmission utility, POWERGRID.

India’s demand for electricity, fuelled by its strong growth, has sharply exceeded supply in recent years, with a peak power deficit of over 12 percent in 2010.

The generating capacity has been increasing over the years in India but expansion of the transmission network has not kept pace. Some states have the capacity to generate more power than they need, and creating  inter-regional transmission corridors’ will allow them to move surplus electricity to areas short of supply.

To develop the national grid, POWERGRID plans to invest about $22 billion to more than double the size of its transmission network between now and 2017, thus expanding its funding base from the present sources of domestic bonds and government-guaranteed loans to new foreign commercial borrowing.

The project is due for completion in 2017.

BBN/SSR/AD-01Oct11-1:29 am (BST)