Germany to give India euro 1 bn loan for green energy development

Berlin, April 10 (IANS) Germany will provide India a soft loan of euro 1 billion (Rs.71 billion) for strengthening the transmission system of renewable energy in several states, a top official said Wednesday.

The loan will be used for developing a “renewable energy corridor”, the official added.

“We are hopeful of signing the agreement tomorrow (Thursday),” said Renewable Energy Minister Farooq Abdullah.

Abdullah, who is part of a delegation led by Prime Minister Manmohan Singh that arrrived here Wednesday on a three-day visit, said the deal would be signed after the second round of inter-governmental consultations between the two countries here Thursday.

Officials said cooperation in green energy would be one of the focus areas of discussion when the prime minister meets German Chancellor Angela Markel Thursday.

The two countries are also likely sign a joint declaration of intent for cooperation in green energy.

According to new and renewable energy secretary Ratan P. Watal, an investment of around Rs.40,000 crore ($7.5 billion) is required for strengthening the transmission system of green energy in India over the next four years.

“We aim to create 30,000 MW of additional capacity in renewable energy sector during the 12th Plan period (2012-17),” Watal, who is also part of the high-level delegation, told IANS.

This will require an investment of over Rs.200,000 crore (around $37 billion).

Watal said the states that will benefit from the German financial assistance include Gujarat, Maharashtra, Tamil Nadu, Rajasthan, Karnataka, Andhra Pradesh and Himachal Pradesh.

The money will be used largely by Power Grid Corporation for creating new transmission system and strengthening the existing one.

“The loan will be guaranteed by the government and it will have low interest rate of 2-3 percent,” Watal said.

(Gyanendra Kumar Keshri can be contacted at [email protected])

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