HP to get 3,800-cr ADB funding

For the hill state, whose annual budget for 2008-09 is just Rs 12,542 crore, the ADB assistance for four medium and mega hydel projects is expected to give a major boost to power generation plans.

The funding, which will be in the ratio of 90:10 as grant and loan, would be utilised under Himachal Pradesh Clean Energy Development Investment Programme.

The agreement was signed by Govind Mohan, Director (Infrastructure), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and Tadashi Kondo, Country Director of Indian Resident Mission of Asian Development Bank, in Delhi today.

The project agreement was signed by state’s Principal Secretary (Power) Ajay Mittal, Himachal Power Corporation MD Tarun Kapoor and Jagdish Sharma, Member (Finance), in the State Electricity Board.

Chief Minister Prem Kumar Dhumal congratulated the authorities for succeeding in getting the highest-ever ADB loan sanctioned for the state, which is bound to boost hydel power generation in the state.

He said that the state government had been pursuing the case at different stages with the Government of India and ADB to get the amount sanctioned on priority so that execution of the proposed projects could be started on priority.

The projects identified for execution by the Himachal Power Corporation with ADB funding include

Sawra-Kuddu (111 MW); Kashang-I, II and III (195 MW), Sainj Project (100 MW) and the Shongtong-Karchham (402 MW). The state government, so far, has allotted six projects to the Corporation.

The total generation from these four projects will be in an order of 3,434 million units and the estimated cost would be about Rs 7,500 crore, of which the ADB has agreed to finance $ 800 million in the form of a multi-tranche financing facility.

“The loan will be covering around 53.3 per cent cost of the projects. For the remaining amount, funding will be arranged from equity and other financial institutions. The biggest advantage to Himachal will be that the funding will be on the pattern of 90:10, grant and loan, respectively, and will be repaid over a period of 25 years,” said Dhumal here.

Himachal has a power potential of 21,000 MW, of which only 6,400 MW has been exploited so far.

However, some Central PSUs, including NHPC, NTPC, and joint ventures and the private sector have been allotted major projects to generate at least 10,000 MW of power by 2015.