The Himachal Pradesh government entered into Memorandum of Understanding (MOU) with the Asian Development Bank (ADB) for availing a $800 million (Rs 3800 Cr) loan to be invested for hydro power generation in the state sector.
The agreement was signed by Govind Mohan, director infrastructure with central ministry of finance, Tadashi Kondo country director Asian Development Bank, Ajay Mittal principal secretary power Himachal government, Tarun Kapoor MD HP Power Corporation Ltd and Jagish Sharma, member finance HP State Electricity Board at Delhi on Monday.
The loan would be used for execution of four medium to large hydro electricity projects in the state by HP Power Corporation under clean energy development investment program, a government spokesman stated.
The ADB loan happens to be the highest amount the state has been able to obtain for investment in long term infrastructure projects.
With the culmination of the loan agreement, construction of four projects, namely Sawra-Kuddu (111MW); Kashang-I, II and III (195MW), Sainj Project (100MW) and the Shongtong0Karchham Project (402 MW) would be ensured.
Chief minister Prem Kumar Dhumal revealed that on commissioning these projects the annual generation would be to the order of 3,434 million units.
Total estimated cost of the proposed projects was $ 1.5 billion (about Rs. 7,500 crore) out of which ADB had come forward to advance $ 800 million in the form of a multi-tranche financing facility, he said.
The loan would cover 53 percent cost of projects and the remaining amount would be funded from equity and other financial institutions.
The loan would devolve to the state on the pattern of 90:10 ratio as grant and loan term loan from the central government that would need to be repaid over a 25 year period.