New Delhi: Power Grid Corp, the country's largest power transmission utility, today said it has signed agreements with World Bank and Asian Development Bank for two loans of US $ 600 million each for funding projects.

The loan from ADB is a part of the bank's newly introduced loan facility called multi-tranche financing facility (MFF), under which loan assistance can be availed in a number of tranches depending upon the funding requirement.

"A Framework Financing Agreement for MFF had been signed with ADB for US $ 600 million. The MFF loan will be drawn in two tranches," PGCIL said in a statement. In the first tranche, ADB will lend US $ 400 million to the company, it added.

The loan agreement for US $ 400 million was signed by PGCIL Chairman and Managing Director R P Singh and ADB Country Director (INRM) Tadashi Kondo in the presence of officials from the Finance Ministry and the Power Ministry. The government has extended sovereign guarantee for this loan.

"Power Grid has not only tapped domestic markets, but has also been arranging funds from multilateral funding agencies. Signing of this loan of US $ 400 million between Power Grid and ADB is a major milestone in this direction," the company said.

The loan will be utilised to finance part of the fund requirement for a 800 kV High Voltage Direct Current lines under North Eastern Northern/Western Region Interconnector-I Project and a 800kV High Voltage Alternating Current Substations under upgradation of transmission capacity from Uttarakhand project.

The company, which is responsible for developing and operating regional and national transmission grid, has availed three loans amounting to US $ 925 million for its various transmission projects. This is the fourth loan to Power Grid from ADB having a 25 year term.

PGCIL also signed for US $ 600 million from the World Bank to finance its five transmission schemes. The schemes are East-West Transmission Corridor, Western Region System Strengthening Scheme II, Eastern Region System Strengthening Scheme I, Balia-Bhiwadi HVDC Bipole System, and North-West Transmission Corridor.

Source : PTI