India Signs Loan Agreement with ADB for $50 Million Loan To Boost Power Generation Capacity in Assam

The Asian Development Bank (ADB) and the Government of India signed a $50 million loan agreement for the second Assam Power Sector Investment Program which aims to build up the capacity of power generation and distribution systems to meet the growing energy demand in the state of Assam.

The first tranche loan of the $300 million multi-tranche financing facility will fund generation capacity enhancement and distribution efficiency improvement subprojects in the state. 

Shri Tarun Bajaj, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, who signed the agreement on behalf of Government of India said that more than a third of households in the State face daily electricity cuts of 5 to 6 hours, many important businesses, such as the tea gardens, still aren’t connected to the grid, and in peak periods Assam has to buy up to 15% of its power from independent producers at very high cost, said He added that the project will finance investments to augment and improve generation capacity through the replacement of an inefficient generating plant and construction of new hydropower plant. 

Ms. Teresa Kho, Country Director of ADB’s India Resident Mission, who signed the loan agreement for ADB said that ADB has supported Assam’s power sector since 2003 with five loans totaling $450 million, which have helped the State enact key reforms and improve transmission and distribution systems. She further said that the new loan will further support Assam to increase capacity and efficiency of power generation to meet growing local and national demand.The project agreements were signed by Sh. V. B. Pyarelal, Additional Chief Secretary (Power) on behalf of the Government of Assam and Shri K. V. Eapen, Chairman, Assam Power Generation Company Limited (APGCL). 

The project is expected to be completed by 31 December 2018.

 

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Chhatrapur to be first smart grid town in Odisha…

 

Chhatrapur, the district headquarters of Ganjam, will become the first 'smart grid town' in the state after it starts using an advanced technology in power supply that can withstand cyclones with wind speed of around 350 km/hour.

The technology will be implemented under a disaster- resilient power strengthening project funded by the Asian Development Bank (ADB) on an experimental basis.

The other towns in the district, Berhampur and Gopalpur, would also be included in the scheme at a cost of Rs 817 crore, energy secretary P K Jena said here on Saturday.

Energy minister Arun Kumar Sahu said the initiative was necessary as the power sector frequently bore the brunt of nature's fury.

Jena said under the scheme the towns will have underground power supply lines, apart from overhead cables.

Besides, consumers will be alerted about power cuts through SMSes. He was here to felicitate outstanding performers, who helped restore power supply in Phailin-hit Ganjam in quick time.

The government has also decided to set up a one megawatt solar power plant at Chhatrapur, chairman-cum managing director, Odisha Power Transmission Corporation Limited (OPTCL), Hemant Sharma, said.

The officials justified the selection of the three towns, saying Berhampur was the biggest commercial hub in the southern part of the state, Gopalpur, a seashore town, was a tourist place and Chhatrapur was the district headquarters town.

Power infrastructure in the district, particularly in these three towns, was severely damaged in cyclone Phailin in October.

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Tata Power's Mundra UMPP comes under ADB panel scanner…

 

Finding prima facie instances of non- compliance with its norms, ADB's review panel has decided to carry out a compliance review of Tata Power's 4,000-MW ultra mega power project in Gujarat.

Asian Development Bank's (ADB) Compliance Review Committee has said the company failed in consulting most of the affected communities before the project started.

In its report, the panel said there is "prima facie evidence of non-compliance with ADB policies and procedures and prima facie evidence that this noncompliance with ADB policies has led to harm or is likely to lead to future harm".

"Given the evidence of non-compliance... the CRP concludes that the non-compliance is serious enough to warrant a full compliance review," it said.

Meanwhile, Tata Power in a statement said Mundra UMPP strictly abides by stipulated norms for its operations, including environment, community engagement and ecological impact.

"We are happy to cooperate with ADB on any information/ support that may be required while conducting the review," the firm said.

CGPL would always be open to any constructive and transparent process to establish its credentials, it added.

The ADB panel's report follows a complaint filed by Bharat Patel, General Secretary of Machimar Adhikar Sangharsh Sangathan and two other members of the association.

ADB has committed a loan of USD 450 million from its ordinary capital resources without government guarantee to CGPL, of which USD 200 million is syndicated to Export-Import Bank of Korea (KEXIM) through a risk participation agreement.

Mundra project is being implemented by Coastal Gujarat Power Ltd (CGPL).

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ADB plans to fund Delhi Discom’s capital expenditure...

 

Offering a breather to Anil Ambani-owned BSES Rajdhani Power Ltd (BRPL), the Asian Development Bank’s Private Sector Operations Department (PSOD) plans to extend a loan of $80 million to the company, one of the distribution utilities for the Indian capital.

The loan will be used to fund BRPL’s capital investments, which had been impacted after domestic financial institutions expressed their reluctance to increase exposure to the utility.

“It is not a sovereign restructuring but private sector financing to be done by PSOD. It will provide a breather to BSES, which has been unable to raise funds elsewhere,” said a person aware of the development requesting anonymity.

The offer comes in the backdrop of losses and under-recoveries eroding the balance sheet of distribution utilities, resulting in their net worth turning negative.

At the same time, the electricity regulator has turned down a proposal to increase tariffs even as the Aam Aadmi Party (AAP), which has formed the new state government in Delhi, has promised to halve tariffs.

A BSES spokesperson declined comment. The ADB’s India Resident Mission, in an emailed response, confirmed the development and said, “ADB Private Sector Operations Department envisages a loan of USD 80 million in relation to future capital expenditure to BRPL only.”
“The loan has been approved by ADB board,” the email added.

BSES operates in an area of 950 sq. km with a customer base of 3.3 million through BRPL and BSES Yamuna Power Ltd (BYPL). Of these BRPL distributes power to 1.82 million customers spread over 750 sq. km in south and west Delhi.

PSOD provides assistance for projects without sovereign guarantees. These projects can be private entities, state-owned enterprises and municipalities. It also provides commercial co-financing with focus on infrastructure and capital markets or financial sectors.

According to ADB’s loan report and recommendation, “The proposed ADB assistance will provide much needed funding to BRPL for system improvement. BRPL’s existing, mainly public sector owned lenders have limited appetite for further lending to the sector given their overall power sector exposure limits.”

Also, the loan will help in the financing of BRPL’s capital expenditure over the next two years.
“Successful implementation of the project will rehabilitate and/or augment approximately 486 distribution transformers, 266 kilometers (km) of 11 kilovolt (kV) distribution lines, and 16km of extra high voltage lines. It will add 123 new substations, 285 new distribution transformers, 221km of new 11kV distribution lines, and 21km of new extra high voltage lines as well as additional equipment to improve the automated system for billing and settlements,” the report added.

Delhi’s power purchase cost has spiked since 2009 with the distribution utilities incurring losses in power trading. It is estimated that the utilities suffered a loss of Rs.900 crore in 2011-12 due to inaccuracies in demand forecasting and fall in rate of sale of power in the short-term market nationally. Delhi’s power demand is around 5,000 megawatts (MW).

According to PricewaterhouseCoopers, “Higher losses and under-recoveries have eroded the balance sheet of the Discoms; the Discoms had negative net worth in all three years from FY11 to FY13 in spite of equity infusion in BYPL and BRPL in FY12 and in TPDDL in FY13.”
TPDDL is short for Tata Power Delhi Distribution Ltd.

After becoming Delhi’s chief minister, AAP leader Arvind Kejriwal, in a major bureaucratic reshuffle, removed power secretary R.K. Verma and brought in Puneet Kumar Goel in his place.

In addition, Goel also holds the position of chairman and managing director of Delhi Power Co. Ltd and chairman of Indraprastha Power Generation Co. Ltd and Pragati Power Corp. Ltd. Kejriwal has alleged that Delhi residents have been paying twice what they should be for electricity.

ADB plans to maintain its lending levels to India at around $2 billion annually over the next three years. Takehiko Nakao, president of the bank at the time of ADB’s board of governors meeting in May, said though equity investment is an option, the risks need to be assessed before taking a decision.

In its report titled Energy Outlook for Asia and the Pacific released in October, ADB said that India’s energy sector will need $2.3 trillion in investments by 2035, accounting for the maximum investment requirement in South Asia.

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ADB to provide $350m loan for power asset upgrades in Madhya Pradesh...

 

The Manila-based Asian Development Bank (ADB) today said it had approved a $350 million loan for power asset upgrades in Madhya Pradesh that will allow the state to meet booming consumer demand for power.
 
“The state has made impressive network gains in recent years but demand is outstripping supply, and the quality of electricity needs further improvements, especially in rural areas,” said Mr Herath Gunatilake, Lead Energy Economist in ADB's South Asia Department.
 
“Our assistance for transmission and distribution improvements will help Madhya Pradesh’s efforts to provide good quality power, 24 hours a day," he said.
 
A press release from ADB said that Madhya Pradesh, whose economy is growing at a quicker rate than the national average, was expected to see its demand for electricity rise by about 11% a year between fiscal years 2013 to 2017, resulting in a potential transmission and distribution capacity gap of about 20%.
 
The mismatch between supply and demand has caused regular load shedding in the past, and currently only about two-thirds of all households are connected to the system, it said.
 
The Madhya Pradesh Power Transmission and Distribution System Improvement Project will carry out physical upgrades to increase capacity and deliver power more efficiently. It will fund about 1,800 circuit kilometers of transmission lines and more than 3,100 circuit kilometers of distribution lines, as well as building or upgrading transmission and distribution substations, the release said.
 
Training and other support will be given to staff of the Madhya Pradesh Power Transmission Company, as well as three state distribution companies, to strengthen their management capabilities and to make the companies more financially sustainable and service oriented.
 
The project will build on previous ADB investments in the state’s power sector - including transmission and distribution assets - totaling more than $1.3 billion since 2001.
 
Along with ADB’s loan from ordinary capital resources, the Government of India will provide $150 million for a total investment cost of $500 million. It will run for about four and a half years with an estimated completion date of December 2018, the release added.

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ADB proposes USD 80 K loan to RInfra's Delhi distribution arm for improvement of distribution system...

 

The Asian Development Bank proposes to finance the BSES Rajdhani Power Limited (BRPL),  Reliance Infrastructure's Delhi Distribution arm, the amount of USD 80,000 for the improvement of  Delhi Electricity Distribution System.

 

According to ADB, the Project involves the improvement of the electricity distribution network in south and west Delhi including the rehabilitation of sub-stations, augmentation/replacement of transformers and other system efficiency improvement measures through the financing of BRPL's capital expenditure over the next two years.

Objectives and Scope

ADB assistance will:

1. Allow BRPL to reduce aggregate technical and commercial losses in south and west Delhi by 3.5% over the next two years,
2. Support the national and state governments in their efforts to reduce the technical and commercial losses of the Indian distribution network,
3. Reduce the electricity demand-supply gap through an environmentally sustainable intervention without any new generation capacity addition,
4. Catalyze private investment in Indian distribution sector.

 

Project Rationales as per the ADB

The Project is consistent with ADB's Strategy 2020.

Under Strategy 2020, ADB is committed to promote energy efficiency through supply-side measures. The Project is aligned with the India Country Partnership Strategy (CPS) 2013-2017. The CPS underlines the need for ADB to focus on expanding availability and access to energy by reducing losses and strengthening infrastructure and highlights that investments in the energy sector should target distribution networks at the state level. The Project is also in line with the Energy Sector Policy (2009) which highlights energy efficiency improvements in transmission and distribution systems. The policy proposes that ADB will continue to support installation of modern transmission systems to transmit electricity efficiently from generation facilities to consumers, including upgrading of existing systems to reduce technical losses. In addition, the Energy Policy 2009 encourages the facilitation of private sector investments to improve energy efficiency.

Description of Project Outputs

Improved electricity distribution network in South and West Delhi.

Summary of Environmental and Social Aspects

The Project is classified category B for environment, category B for involuntary resettlement, and category C for indigenous people. In accordance with ADB's Safeguard Policy Statement (2009), the potential environmental and social impacts and risks of the project have been identified. No land acquisition or resettlement is envisaged, land will be provided by government agencies. In addition, the environmental impacts of the project are expected to be limited and will be site-specific, reversible and mostly associated with temporary construction activities. The institutional capacity of BRPL to manage the project' social and environmental impacts will be strengthened. The company is committed to continue to build the capacity of its staff and contractors to effectively manage such possible impacts.

The complete Project Data Sheet of the proposed Project can be downloaded from here.

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ADB proposes equity investment in welpsun renewables to the tune of USD 50 K...

 

Asian Development Bank has released a Project Data Sheet (PDS) under which it has proposed to invest in Welspun Renewables Energy Limited's (WREL) projects on Solar and Wind Power Development.

 

As per the PDS, ADB may invest around USD 50,000 into the company in the form of Equity investment.

As said by the ADB

WREL is one of the leading renewable power developers in India. As of November 2013, WREL had 309 MW of operational projects (289 MW of solar projects in Andhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, and Rajasthan; and 20 MW of wind projects in Rajasthan), 211 MW of projects under construction (119 MW solar and 92 MW wind), and a pipeline of 1.2 GW of projects at various stages of development. The project will help the company reach at least 600 MW of operational projects by March 2016.

ADB proposes the said investment based on the following criteria:

• The project is consistent with ADB's Strategy 2020.
• It relates to two of the strategy's five core pillars: infrastructure and environment. The strategy calls for ADB support to clean energy development to meet growing energy demands in a sustainable manner.
• The project will also contribute to ADB's operational goal of scaling up private sector development. The project is also aligned with the India country partnership strategy, 2013 2016, which calls for the expansion of clean and renewable energy development (solar, hydro, wind, biomass) and more commercial approaches to support the deployment of advanced, energy efficient, and renewable energy technology including solar and wind energy.

With the project pertaining to expansion of clean and renewable energy and thereby contributing to climate change mitigation efforts by reducing greenhouse gas emission, ADB requires WREL to adopt an environmental and social management system (ESMS) satisfactory to ADB prior to ADB's investment.

While Welspun has agreed to develop its capacity, as desired by ADB, to oversee the ESMS implementation at the corporate and project level, the project proponent will also comply with ADB's Social Protection Strategy and report to ADB on measures taken to ensure the same.

The PDS as released by ADB can be accessed here.

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ADB to support IIM-A’s clean tech initiative...

 

The Asian Development Bank (ADB) is supporting an initiative of IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship in holding an intensive boot-camp and accelerator programme for early stage startups and individuals in the area of clean tech.

The PowerStart programme is for early stage ventures and individuals keen on accelerating their ideas. Participants will get access to four days of rigorous mentoring at IIM Ahmedabad.

During this four-day boot-camp, the ventures will get to interact with all relevant stakeholders of the ecosystem – including policymakers, successful entrepreneurs, investors, among others.

Subsequently the entrepreneurs will also be provided with 3-4 months of active acceleration support from mentors in the Infuse ecosystem. All travel and lodging expenses of participants will be borne by ADB and Infuse. ADB’s support for the programme comes from its Climate Technology Finance Centre.

The selected ventures would also be considered for investment between Rs 25 lakh and Rs 5 crore by Infuse Ventures, based on the needs of each venture, said a press release. Infuse Ventures is an India-focussed early stage venture capital fund set up and managed by the Centre for Innovation Incubation and Entrepreneurship.

“There are several untapped opportunities in the clean tech sector which PowerStart entrepreneurs can explore during their engagement with us,” says Kunal Upadhyay, CEO, Infuse Ventures.

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ADB approved $500 million loan for transmission system of renewable energy projects in India...

 

The Asian Development Bank has decided to provide a $500 million loan for the development of a transmission system for evacuation of renewable energy projects such as solar and wind energy in western India.

 

The loans from the Manila-based bank come at a time when India is looking to boost dollar inflows to prop up the sagging rupee.

 

As said by the ADB, boosting of renewable energy projects for Rajasthan and other parts of India is a way to meet fast growing energy needs in an environment friendly manner and also improve the country's energy security by reducing reliance on imported fossil fuels.

 

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More literature on this...

http://articles.economictimes.indiatimes.com/2013-09-27/news/42463964_1_renewable-energy-project-energy-security-adb

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RPower’s Dahanu Solar Project started commercial operations with RInfra of Maharashtra…

Power India found that the 40 MW Solar PV Project of Reliance Power Limited (RPower) at Jaisalmer, Rajasthan has started commercial operations with Reliance Infrastructured Limited (RInfra) and providing electricity to households and business in Maharashtra.

 

Under the Power Purchase Agreement, the entire power generated by this plant would be supplied to Maharashtra.

The plant is located, 180 km in the West of Jodhpur, and has one of the highest levels of solar irradiation in the country.

As said by Mr. Michail Barrow, Director of Asian Development Bank (ADB)

"Reliance Power's Dahanu solar plant in Rajasthan has been connected with the national grid and started supplying power. "The 40-megawatt plant is expected to produce more than 60 million kilowatt hours of electricity a year, enough to light up more than 70,000 average Indian households, while avoiding more than 60,000 metric tons of harmful carbon dioxide emissions per year," he said.

The $ 147.5 million Dahanu plant, near the village of Dhursar in the Jaisalmer district, is one of the largest such units in the country.

ADB has provided $ 48 million loan for this project. It is also lending $ 103 million to Reliance Power to help build the Rajasthan Concentrating Solar Power Project, which will be located adjacent to the Dahanu plant.

 

The arid, barren landscape of this part of the state was found to be an ideal location for the 350-acre plant that comprises 500,000 solar panels. It has more than 500,000 ground-mounted photovoltaic thin-film modules, which were procured from First Solar.

Concentrating solar power and photovoltaic solar power are different methods of generating electricity from the energy of the sun. The Indian government is looking to develop both the methods.

The Dahanu plant is part of ADB's goal of developing, financing, or commissioning 3,000 MW of solar energy generation capacity in Asia by May 2013.

 

ADB's Asia Solar Energy Initiative is aimed at helping to ensure that the region's demand for energy is met in a way that is environmentally sustainable.

 

In addition to the two plants, ADB is supporting the development of a solar park in Charanka in Gujarat by financing a transmission line and substation to evacuate power.

 

The multilateral agency has also set up a financing facility to provide partial credit guarantees to lenders willing to fund solar power projects of up to 25 MW. That facility is designed to help reduce risk for the private sector, and to mobilise long-term funding for solar energy development.

 

 

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RPower’s Dhursar Solar CSP Plant received USD 103 Million from ADB…

Reliance Power Limited (RPower)  received around USD 103 Million from Asian Development Bank (ADB – The multilateral lending agency) for its 100 MW Solar CSP Project (Solar Thermal Project) which is being developed at Dhursar, Jaisalmer District of Rajasthan.

 

MR. S. Chander, Director General (Regional and Sustainable Development Department), ADB said on Tuesday:

"I would like to to inform you that ADB has just agreed to extend financing for Reliance Power's 100-MW concentrated solar thermal plant which will be one of the largest solar power generation facilities in India and Asia as well,"

This was announced while Mr. Chander was addressing the inaugural session of the fourth Asia Solar Energy Forum, which is being attended by several public and private sector experts, investors, and companies.

Power India found that the Dhursar Solar Project is expected to be completed on May 2013 and will be having investment of around USD 415 Million.

 

Besides ADB, other bilateral agencies and local lenders will provide funds for the project.

 

The proposed project will be the first Solar CSP (Solar Thermal)  plant built by Reliance Power, which is a listed company of the Reliance ADA Group.

The proposed plant is being set under Govenment of India’s (GoI) ambitions Jawaharlal Nehru National Solar Mission (NSM).

Under the Jawaharlal Nehru National Solar Mission (NSM) that started in January, 2010, the country aims to have 2,000 MW of installed solar power generation capacity by 2013, which would be further increased to 10,000 MW by 2017 and to 20,000 MW by 2022.

Reliance Power was one of the successful bidders to develop 470 MW of concentrating solar power capacity under the first phase of the NSM.

The plant will be located near the village of Dhursar in the Jaisalmer district of Rajasthan, which is about 180 km from Jodhpur. The site has one of the highest levels of direct sunlight in the country.

The plant is estimated to avoid more than 2.5 lakh tonnes of carbon dioxide emissions every year, compared to the energy produced by a conventional fossil fuel plant.
The project will share a transmission line with the Reliance Power's existing 40 MW Dahanu solar power plant which is also partly financed by the ADB.

"This 100-megawatt plant will help meet growing energy demand in India in a way that avoids emission of harmful greenhouse gases," said Michael Barrow, Director, ADB's Private Sector Operations Department.

He further said, "We hope that the success of this project will spur others to invest in the solar energy sector, which has massive potential in India."

According to the Asian Development Bank, it will be one of the largest solar plants in India and the loan marks ADB's first-ever financing for a concentrating solar power project.
Concentrating solar power captures solar energy to convert water into steam, which in turn drives a steam turbine to produce energy. Photo-voltaic plants convert sunlight into electricity through solar panels using semiconductors.

ADB is supporting the development of solar energy in Asia, as part of its goal of promoting environmentally sustainable economic growth.
Under its Asia Solar Energy Initiative, announced in May 2010, ADB aims to commission or support 3,000 MW of solar power capacity in developing member countries by May 2013.

 

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