World Bank to give US$1 bln loan to India's powergrid

The World Bank will give a loan of US$1 billion to power transmission company Power Grid Corporation of India Ltd (PGCIL) (BSE:532898) this year for developing infrastructure in the sector.

"World Bank will provide US$1 billion loan to PowerGrid by June this year and the Centre has agreed to stand guarantee for it," sources close to the development said.

PGCIL has won transmission projects for the three Ultra Mega Power Projects (Sasan, Mundra and Krishnapatnam) awarded by the Government.

Upgradation of electricity transmission network of the country in the current Plan Period (2007-12), requires investment to the tune of Rs 70,000-75,000 crore (US$14.4-$15.4 billion) and the World Bank loan would form a part of this investment.

Out of the total investment the private players are expected to pump in Rs 20,000 crore (US$4.09 billion) and the rest would be spent by the public sector utilities including PowerGrid.

PowerGrid which plans to set up an inter-regional transmission capacity of 37,000 MW and 67,000 circuit kilometres of transmission lines by the end of the current plan period is investing around Rs 75,000 crore for the same during the stipulated time period.

It recently commissioned the Ranchi-Sipat transmission line enhancing power transfer capacity from 1,200 MW to 3,000 MW between eastern and western regions.

With this achievement, total inter-regional power transfer capacity of National Grid has been enhanced to 18,700 MW from the existing level of 17,000 MW.