( dpa ) - The Asian Development Bank said Tuesday that it approved a 600-million-dollar loan to help fund an ambitious project to expand India's power transmission grid and link stable, clean energy supplies to areas suffering shortages.
The Manila-based bank said it would also review for approval a potential second loan of 400 million dollars later this year for the project by the Power Grid Corporation of India Ltd.
The initial loan would fund the construction of a high-voltage power-transmission system to transmit hydropower generated in northern and north-eastern India to demand centres in the west and within the northern region.
The total cost of the project is 2.54 billion dollars, the bank said. Power Grid is to invest 762 million dollars and raise the balance from other financial institutions.
Annual electricity consumption in India was expected to rise by 8 per cent annually. While more than 80 per cent of villages already have electricity, 44 per cent of India's households have access to it, and in rural areas, 33 per cent have access.
Except for eastern and north-eastern India, the rest of the country faces power shortages.
"This loan will help the government of India optimize the power supply mix through greater use of indigenous hydropower resources and maximize energy efficiencies," said Tomoyuki Kimura, principal energy specialist of the bank's South Asia department.
"Access to electricity is a key driver of economic growth and poverty reduction," he said. "The government's five-year plan targets providing electricity to all households at an affordable price by 2012, which will require additional generating capacity of 78,000 megawatts."