The Indian state of Himachal Pradesh will receive loans of up to $350m from the Asian Development Bank (ADB) for transmission system upgrades to take greater advantage of its vast hydropower resources.
The board of directors of ADB has approved the multitranche financing facility for the Himachal Pradesh Clean Energy Transmission Investment Program, with a first investment of $113m.
This program will fund new high voltage power lines and other transmission infrastructure to allow the state to increase output to meet growing demand for electricity.
HP Power Transmission Corporation will also get assistance to strengthen its financial and asset management capabilities.
The first tranche loan from ordinary capital resources, scheduled for 2011, has a 25-year term, with a grace period of five years.
The remaining funds are expected to be disbursed in two further tranches through to 2014, ADB said.
The Government of Himachal Pradesh will provide counterpart funds of almost $88m for a total program investment cost of about $438m.