Washington, DC (BBN)- The World Bank has approved a US$400 million loan to the Power Grid Corporation of India, designed to increase reliable power exchange between regions and states.
The loan, from the International Bank for Reconstruction and Development (IBRD), is backed by a Republic of India guarantee. It has a 30 year maturity which includes a 4-year grace period, the World Bank said in a press statement.
Despite a fast growing economy, India’s growth potential is constrained by inadequate electricity services and limited power generation and transmission infrastructure.
Over forty percent of the population is without electricity, and the cost of erratic and insufficient power supply is high for industry as well as households, the statement added.
The additional financing to the Fourth Power System Development Project (PSDP IV), which was approved by the World Bank on March 18 this year, will finance the completion of selected transmission schemes intended to expand transmission system and capacity.
The World Bank has been actively involved in the reform and development of the transmission sector in India, and specifically in the creation and strengthening of the Power Grid Corporation of India.
This is the fifth direct loan the Bank has made to Power Grid since 1993.
During this period, the company has nearly tripled its transmission network, its assets have grown more than ten-fold to US$8.9 billion, and revenues have increased more than eight times to US$1.3 billion. Today, Power Grid is the world’s third largest transmission utility.
BBN/SI/SS/AD-23October08-12:52 PM (BST)