Power Grid signs for $1.2 bn loan from ADB, WB

Written by Agencies | New Delhi, March 28: | Updated: Mar 28 2008, 23:32pm hrs
Power Grid Corp, the country's largest power transmission utility, today said it has signed agreements with World Bank and Asian Development Bank for two loans of USD 600 million each for funding projects.

The loan from ADB is a part of the bank's newly introduced loan facility called multi-tranche financing facility (MFF), under which loan assistance can be availed in a number of tranches depending upon the funding requirement.

"A Framework Financing Agreement for MFF had been signed with ADB for USD 600 million. The MFF loan will be drawn in two tranches," PGCIL said in a statement. In the first tranche, ADB will lend USD 400 million to the company, it added.

The loan agreement for USD 400 million was signed by PGCIL Chairman and Managing Director R P Singh and ADB Country Director (INRM) Tadashi Kondo in the presence of officials from the Finance Ministry and the Power Ministry. The government has extended sovereign guarantee for this loan.

"Power Grid has not only tapped domestic markets, but has also been arranging funds from multilateral funding agencies.

Signing of this loan of USD 400 million between Power Grid and ADB is a major milestone in this direction," the company said.

The loan will be utilised to finance part of the fund requirement for a 800 kV High Voltage Direct Current lines under 'North Eastern Northern/Western Region Interconnector-I Project' and a 800kV High Voltage Alternating Current Substations under 'upgradation of transmission capacity from Uttarakhand project.'