ADB okays $250m Indian loan

ADB okays $250m Indian loan

MANILA (Dow Jones): The Asian Development Bank said Friday it has approved a US$250 million loan for a national power grid in India for interstate electricity transmission.

The ADB also extended a partial credit guarantee to Power Grid of India Ltd., or Powergrid - the project's proponent - to back the government agency's plan to secure a 15-year, $120 million loan from a syndicate of commercial banks.

The project, to be completed in 2005, will also enhance the autonomy of Powergrid, a government agency responsible for the construction and operation of India's main electricity transmission network, the ADB said.

The project will allow Powergrid increase power distribution efficiency by sharing power reserve margins, trading surplus electricity, and long-term power transfers between regions with low-cost hydropower or coal resources, the bank said.