You are on page 1of 24

ADB Power Projects in India


In August 2007, the Asian Development Bank (ADB) released its evaluation of
energy sector lending in India which concluded that its aid has generally been
successful as a result of targeting state electricity sectors that were
“thoroughly committed to change”. The study highlights the following: a

o ADB began its power sector operations in India in 1986; by mid-2007, there have
been 24 public sector loans for 21 projects, with a total value of $4.6 billion (29%
of total public sector lending to India). ADB provided an additional $337 million of
loans through its private sector operations. These loans were supported by 50
technical assistance (TA) projects, valued at $23.5 million. A further $1.9 billion in
public sector loans are in ADB’s funding pipeline. ADB loans have focused on
transmission and distribution and more recently on power sector restructuring.
Private sector operations are now taking a larger role in financing generation.
ADB provided program assistance to three state electricity boards/SEBs: Assam,
Gujarat, and Madhya Pradesh.

o The major issues facing the Indian power sector are fourfold: (i) New investments
in the energy sector will depend on the commercial viability of the distribution
sector to guarantee the power purchase agreements or prudential requirements.
(ii) Funding for the power sector, and particularly the distribution sector, will
depend upon reforms and to make this sector self-funding. The generation and
transmission sectors are likely to become self-funding. (iii) The availability of
secure, reliable, and well-managed sources of fuel supplies to the generation
sector and other energy intensive industries is threatened by shortages and will
need to be developed in tandem with the industry expansion. (iv) Managing the
environmental impacts of the electricity sector is increasing in importance, as the
system is expanding and the primary fuel source is coal.

o The impacts of electricity reforms have increased competitiveness and led to a


demonstration effect among the states’ electricity sectors and their regulators,
adding momentum to the central government’s impetus for reform. The positive
outcomes have isolated national anti-reform movements. The effects of reforms
are incremental, rather than “big bang,” and follow an Indian development model
rather than one imposed by outside assistance agencies. The reforms are
gradually shifting the financial risks from the consumer to the management of the
electricity sector.

o In all three SEBs evaluated (Assam, Gujarat, and Madhya Pradesh,), unbundling
has been achieved and new separate corporate entities with “clean” balance
sheets have been established as a result of restructuring. The restructuring
included partial state assumption of liabilities, more transparent subsidies,
renegotiation of power purchase agreements, rationalization of state-owned
generation to promote merit order dispatch, and changed organizational
structures and cultures that were re-focused on service delivery. All states


By VIOLETA P. CORRAL, Public Services International Research Unit-Asia
(www.psiru.org), August 2009.
a
See: Energy Sector in India – Building on Success for More Results, Sector Assistance Program
Evaluation, ADB Operations Evaluation Department/OED, Aug 2007 (pp iii-vi)
http://www.adb.org/Documents/Reports/SAPE/IND/SAP-IND-2007-17.pdf

1
indicated that ADB assistance was catalytic in providing the impetus to
implementing the reform process.

o The transformation process for unbundling the distribution companies is well


developed but has not been completed. In Assam, there is a concern that the split
into three distribution companies may not have been optimal; concerns that the
required future staff expertise and numbers, together with unbalanced customer
mixes, may lead to at least one distribution company’s being unsustainable.

o The outcome of TA support to the regulators in Assam and in Gujarat was


successful and is sustainable. The state regulators have developed a high degree
of independence and are proactively regulating the SEBs’ generation,
transmission, and distribution sectors, with increased performance-based
regulation replacing normative, cost-based regulation.

o Loans to Power Grid Corp were timed to extend and upgrade the grid, connect
new supply to the grid, facilitate interregional transfer of power to optimize costs
and grid operations, and to gain efficiencies in service delivery at a time of
national shortages. Continued financial support will be required for Power Grid to
develop its interregional transmission capacity from 9,500 megawatts (MW) to
over 30,000 MW by 2012.

Over the period 2008–2010, support for infrastructure development will


remain the core focus of ADB’s India assistance strategy; energy projects
account for 26% of total loan amount.b ADB will consolidate its operations in
‘weak’ states, such as Assam, Chhattisgarh, Jammu and Kashmir,
Uttarakhand, and those in the North Eastern region. ADB will assist relatively
poorer states of Bihar, Jharkand, and Orissa. Energy loans include assistance
to Uttaranchal, Madya Pradesh, Bihar and Himachal, Assam and Haryana,
Gujarat, Jammu & Kashmir, and state-owned corporations (Power Grid Corp,
National Thermal Power Corp/NTPC, Power Finance Corp, Rural Electrification
Corp).

Private sector operations include loan packages to Tata Power Company Ltd
to undertake: (a) Mundra Ultra Mega Power Project ($750M), a 4,000 MW
coal-fired power plant on a build-own-operate basis in Gujarat; (b) Wind
Energy Financing Facility ($79M) to demonstrate successful implementation
of large-scale wind power projects by private sector; and (c) Tata-Delhi Power
Transmission/TDTL ($62M), ADB’s first private sector power transmission
project. TDTL is a joint venture between Tata Power and POWERGRID to
evacuate power from Tala HEP in Bhutan and transfer surplus power from
India’s eastern region to power-deficit northern region. A corporate financing
facility will be used for capital expenditures of generation plants being
developed by NTPC, the largest electric power generator in India; although an
SOE, NTPC is operated as an independent commercial entity.

b
See: Country Operations Business Plan: India (2008-2010), ADB, Sep 2007
http://www.adb.org/Documents/CPSs/IND/2007/COBP-IND-2007.pdf

2
TITLE DESCRIPTION TYPE OF DATE OF AMOUNT

ASSISTANC APPROVA (US$)
E L
NORTHEAST REGION (NER) - comprised of Assam, Arunachal Pradesh, Meghalaya, Nagaland, Tripura,
Mizoram, Manipur, and Sikkim
North East Region Project is expected to include clean power Loan PROPOSED 250.0M –
Power Development generation, transmission, distribution, and (for OCR
Project1 efficiency enhancements in power system and approval in
improve the well being of the people and the Jan 2010)
(South Asia Dept) environmental quality. PPTA Dec 2004 0.75M
Project will support Government’s Power for All by 2012 efforts in NER using locally available
resources including hydropower, natural gas, renewable energy sources, provision of critical
transmission and distribution facilities, and support for institutional strengthening.
ASSAM
Assam Power Sector 1. Transmission Capacity Expansion: Loan - MFF PROPOSED 200.0M -
Enhancement Construction of new transmission lines (657 (for OCR
Investment Program ckm.) and 12 substations and augmentation of approval 30
(Facility Concept) 2 existing substations. 2. Transmission and Sep 2009)
Distribution Loss Reduction: Refurbished existing
NAOKI SAKAI substations, adoption of HVDS and LT-less
nsakai@adb.org systems, and installation of ADB cables. 3.
(South Asia Dept) Access to Power: Construction of 27 new sub-
stations, augmentation of 18 existing sub-
stations and addition of new 845 km distribution
lines.
4. Distribution Financing (PPP): Investment in
last-mile distribution lines, bulk metering and IT
systems for billing and metering for franchisees.


ADF – Asian Development Fund (concessional terms); OCR – Ordinary Capital Resources (less concessional); MFF –
Multitranche Financing Facility

3
Assam Power Sector (i) develop appropriate policy, legal and Policy Loan Dec 2003 150.0M –
Development regulatory framework to ensure a balanced (CLOSED) OCR
Program 3 growth of power sector; (ii) enhance sector
TOMOYUKI KIMURA efficiencies by establishing commercial and
tkimura@adb.org competitive business environment; and (iii)
(South Asia Dept - improve financial viability of sector.
Project) (i) Improvement of transmission system; (ii) Project Loan Dec 2003 100.0M –
Improvement of distribution system (APDRP (CLOSED) OCR
KIYOSHI TAKEBAYASHI fund); (iii) Intensification of rural electrification;
ktakebayashi@adb.org (iv) Revenue Management System; (v)
(South Asia Dept – Consulting Services
Policy)
CLOSED PROJECTS Institutional Development for Rural Electrification; Reorganization of Assam State
(TAs, approved Dec Electricity Board; Policy and Legal Support for Power Sector Reforms; Building
2003) 4 Capacity of Assam Electricity Regulatory Commission
HIMACHAL PRADESH
Capacity Building for Comprehensive power system master plan, with TA Special Nov 2008 0.9M
Himachal Pradesh focus on transmission system expansion plans to Fund
Power Sector ensure their adequacy and that they are
Agencies 5 coordinated with the existing and already
ANDREW JEFFRIES planned generation expansion.
ajeffries@adb.org
(South Asia Dept)
Himachal Clean Help Himachal become India’s ‘hydropower MFF - Loan Oct 2008 800.0M –
Power Development state”. Physical investments in hydroelectric OCR
(Facility Concept)6 power generating facilities in northwestern state
of Himachal Pradesh, and nonphysical
ANDREW JEFFRIES interventions in capacity development
ajeffries@adb.org Consists of Sawra Kuddu HEP, Stage I of Kashang MFF - Tranche Oct 2008 150.0M –
(South Asia Dept) Hydroelectric Project, and $12 million capacity 1 OCR
development component; main objective is to
help fulfill local demand.
Physical investments will include construction of hydropower generation facilities, underground
power houses, associated civil works, tunnels, river diversion and power evacuation systems.
Capacity development to Himachal Pradesh Power Corporation Ltd. includes fiduciary oversight

4
and governance, knowledge management, safeguards, procurement, project implementation,
supervision, and monitoring capabilities. Construction of four medium to large hydropower
projects -- Sawra Kuddu (111 MW), Integrated Kashang (stage I, II and III totaling 243 MW),
Sainj (100 MW) and Shongtong-Karcham (402 MW).
BIHAR
Capacity Support BERC in its future role in restructured TA Special PROPOSED 0.2M
Development of Bihar power sector in Bihar. Fund (for
State Power Sector approval
Agencies June 2010)
(Bihar Electricity (i) establish norms of operation for the sector companies; (ii) rationalization of electricity tariff
Regulatory Commission/ and settling up norms for disaggregated tariffs for generation, transmission and retail supply
BERC) 7 tariffs; (iii) revise existing grid code; (iv) specify security of supply, metering and energy
ANDREW JEFFRIES accounting norms; (v) review and ratify financing restructuring plan; (vi) set up licensing
ajeffries@adb.org standards; and (vii) other areas to be identified during the fact-finding mission. TA will set up
(South Asia Dept) twinning arrangements with Indian and international regulatory commissions for BERC
members to obtain on-the-job training.
Bihar Power Sector (i) Meet GOI’s “power for all by 2012” objective, Loan PROPOSED 300.0M -
Development (ii) develop run-of-river hydropower to meet (for OCR
Program 8 Bihar’s generation gap, (iii) expand and approval
ANDREW JEFFRIES rehabilitate transmission and distribution lines, March
ajeffries@adb.org substations to improve reliability of power. 2010)
(South Asia Dept)
Developing the Outputs include an electricity demand forecast TA Special April 2008 0.6M
Power System Master for Bihar, determination of generation supply Fund
Plan for Bihar 9 options, generation expansion planning and
ANDREW JEFFRIES transmission planning completed by the end of
ajeffries@adb.org May 2009, followed by distribution planning by
(South Asia Dept) the end of July 2009. A transmission &
distribution capital works program and final
project reports are currently proposed for
completion by the end of September 2009.
JAMMU AND KASHMIR
Jammu and Kashmir TA will prepare a project designed to support TA Dec 2007 0.8M – Japan
State Clean Power selected investments in hydropower Special Fund

5
Development10 development and associated transmission
TOMOYUKI KIMURA system expansion to facilitate sector
tkimura@adb.org sustainability, and promote sector reforms in J&K
(South Asia Dept) to further facilitate clean power generation,
transmission and distribution in J&K with
minimum advance environmental and social
adverse impacts.
MADYA PRADESH
Madhya Pradesh Continue promoting power sector reforms, by MFF – Loan Mar 2007 620.0M –
Power Sector II financing further costs of adjustments: (i) (Facility OCR
(Investment Program) 11
implementation of financial restructuring plan, ii) Concept)
align financial restructuring plan with medium
MUKHTOR term fiscal frameworks, (iii) ensure full MFF – Tranche April 2007 106.0M –
KHAMUDKHANOV autonomy for power sector companies, (iv) 1 OCR
mkhamudkhanov@adb. improve legal and regulatory compliance, and MFF – Tranche April 2007 45.0M – OCR
org (v) enhance awareness and communication with 2
(South Asia Dept) stakeholders. ADB will finance transmission MFF – Tranche Aug 2007 144.0M –
component; construction of new transmission 3 OCR
lines will remove constraints to power flow and MFF – Tranche Aug 2007 90.0M – OCR
provide additional operational flexibility to 4
TRANSCO in its role as independent system MFF – Project 5 April 2009 166.0M –
operator. Supply reliability will be further OCR
improved and promote open access and
development of intra-state and inter-state power
trading by providing sufficient excess substation
and line capacity to handle unplanned power
transfers.
Project 5: Part A (DISCOM-C): By 2012: conversion of LVD to HVD (11 kV), introduction of
automatic remote meter reading, and renovation and modernization of 33/11 kV substations -
The draft bidding documents for contract packages (D-04, D-05, D-06, D-07) were submitted to
ADB for approval in Dec 2008 which was subsequently approved in Jan 2009. Bidding
documents were issued in Feb 2009 and bid closing date was extended for the 3rd time up to
23 June 2009. Awaiting submission of bid evaluation reports. [One package (D-08) was dropped
from the list per DISCOM-C request since DISCOM-C intends to include it in the next tranche.]

6
Part B (DISCOM-E): By 2012: conversion of LVD to HVD (11 kV) and separation of agricultural
feeders from village feeders - The draft bidding documents for contract packages were
submitted to ADB for approval in Jan 2009 which was subsequently approved in Feb 2009.
Bidding documents were issued in Feb 2009 and bid closing date was extended for the 3rd time
up to 20 May 2009. Awaiting submission of bid evaluation reports.
Part C (DISCOM-W): By 2012:augmentation, renovation and modernization of 33/11 kV
substations, construction of new 33/11 kV substation, installation of capacitor banks in
substations, construction of new and augmentation of existing 11 kV lines, and enhancement of
IT systems (introduction of SCADA and remote metering reading) - Draft bidding documents for
contract packages were submitted to ADB for approval in Jan 2009 which was subsequently
approved in March 2009 subject to incorporation of ADB's comments. Final version was
approved by ADB in June 2009. Awaiting submission of the final versions of the remaining 8
bidding documents for ADB approval.
Madhya Pradesh Program to facilitate restructuring power sector Program Loan; Dec 2001 150.0M –
Power Sector in Madhya Pradesh to improve sector efficiencies Project Loan (CLOSED) OCR;
Development and to reduce the financial transfers from State 200.0M –
Program 12 Government into power sector. Program to instill OCR
competition, corporatization, commercialization
DAGMAR GRACZYK and private sector participation in power sector
dgraczyk@adb.org to improve quality and quantity of power supply
(South Asia Dept) to customers. Included a policy loan and a
project loan.
Policy framework supported: (1) Madhya Pradesh Vidyut Sudhar Vidheyak, 2000 (the Reform
Act) brought into force 3 July 2001. Act was the most progressive in India at the time and
includes provision for (a) restructuring of Madhya Pradesh State Electricity Board/MPSEB, (b)
mandatory metering of all consumers, (c) rationalization of tariff that all classes of consumers
will pay at least 75 percent of cost of supply (progressively phased over 5 years), (d) subsidies
through Government budget to be allocated before subsidizing any category of consumers (e)
creation of Madhya Pradesh State Electricity Regulatory Commission/MPSERC, and (f) dispute
resolution between GOMP and the MPSERC by reference to Central Electricity Regulatory
Commission/CERC as against reference to courts. (2) Conversion of existing MPSERC into the
first MPSERC (3) Corporatization and commercialization of generation, transmission and
distribution functions of MPSEB. (4) Rationalization of tariff structure and restrictions of free
power supply in Madhya Pradesh (5) Financial restructuring of sector. Project loan component
financed investments for metering, and transmission and distribution systems strengthening

7
and upgrading.

TAs approved 2002 (CLOSED) 13-- Development of a Transfer Scheme for Madhya
Pradesh Power Sector Reform (0.4M TA) – assist MPSEB in developing a scheme under
which employees would be transferred to successor entities. Cabinet approved ‘Employment
Data and Transfer Scheme, Organizational Structures, and Service Rules and Conditions” in
August 2003; transfer of personnel was completed in Sep 2004. Strengthening Consumer
and Stakeholder Communication for Madhya Pradesh Power Sector Reform (0.15M
TA). Legal Support for Madhya Pradesh Power Sector Reform (0.15M TA). Review of
Electricity Legislation and Regulations (1.0M TA)
Energy Smart- TA will provide impetus to Energy Efficiency TA Nov 2008 1.7M -
Facilitating the program by financially supporting activities of ATF
Operations of Energy ECF created for this purpose. Denmark
Conservation Fund in Renewable
Madhya Pradesh 14 Energy
ANDREW JEFFRIES
ajeffries@adb.org
(South Asia Dept)
UTTARANCHAL
Uttaranchal Power (a) Raise output and efficiency of Uttaranchal MFF – Loan March 2006 300.0M –
Sector Investment power sector; and (b) ensure fully inclusive OCR
Program (Facility power services for all type of consumers in
Concept) Uttaranchal: residential, industrial, commercial, MFF Jan 2007 41.92M –
(formerly Chhattisgarh and public administrations. ADB-supported (Subproject 1) OCR
Power Sector investments will increase power supplies by

8
Development Program) 2012, from large and small plants, by adding MFF Dec 2008 62.4M - OCR
15
new assets, and rehabilitating existing ones. (Subproject 2)
HIROKI KOBAYASHI Transmission expansion will enable a more
hkobayashi@adb.org efficient transfer of power within state, and sale
MFF Jan 2009 30.6M - OCR
(South Asia Dept) of excess power to Northern Region grid. Small
(Subproject 3)
hydropower plants investments expected to
generate carbon credits. Subprojects include
design, construction, and commissioning of: (a) MFF PROPOSED (OCR)
10-MW Madhyamaheswar Hydropower Plant; (b) Subproject 4 (for
9-MW Kaldigad Hydropower Plant; (c) 4-MW approval)
Kaliganga I-Hydropower Plant; (d) 6-MW
Kaliganga II-Hydropower Plantand (e)
Hydrological Information System.
Strengthen existing feasibility, environmental, TA Special Aug 2004 0.15M
and social impact studies: (i) expansion of high- Fund (CLOSED)
voltage transmission system; (ii) small
hydropower development (3–25 MW) and
rehabilitation of existing mini-hydropower
facilities (<1 MW); and (iii) institutional
strengthening, inc. preliminary development of a
power trading system.
Uttaranchal Power To accelerate project readiness, and improve TA Special Aug 2005 0.5M
Sector Capacity project management and implementation Fund
Building 16 capabilities.
ANDRA PRADESH
Power Grid Grid strengthening for Tamil Nadu, Andhra Loan 2004 --
Transmission III Pradesh, and Union Territory of
(Subproject) Pondicherry
CLOSED PROJECT Development of a Framework for Electricity Tariffs in Andra Pradesh (TA, approved
Dec 1995)17
MAHARASHTRA
Power Grid Support to Maharashtra State Electricity Loan 2004 10.0M
Transmission III Board/MSEB to develop and implement
(Subproject) integrated software solutions.

9
Power Finance PFC requested by MSEB in July 1999 for technical Loan 1999 --
Corporation and financial assistance in its reform and
(Subproject) restructuring process
TAMIL NADU
Power Grid Grid strengthening for Tamil Nadu, Andhra Loan 2004 --
Transmission III Pradesh, and Union Territory of
(Subproject) Pondicherry
CLOSED PROJECTS Tamil Nadu Electricity Board Operational Improvement (TA); North Madras Thermal
Power Plant (Loan, 1986) ADB’s first loan to India, consisting of two units of 210 MW capacity

KERALA
Kerala Power Sector Improve sector performance technically and TA Oct 2001 0.8M
Development financially, including proposing policy and (CLOSED)
Program18 legislative reforms to address issues
constraining sector development:
(i) Review studies carried out on power sector reforms and restructuring, including a critical
review of the profit center approach, status of their implementation, and drawing up a detailed
plan for sector; (ii) recommend changes or actions needed for restructuring process, and draft a
reform bill; (iii) propose a time-bound action plan to continue and strengthen reform process;
(iv) develop a financial model for Kerala State Electricity Board/KSEB to draw up a financial
restructuring plan; (v) help operationalize restructuring process by identifying key performance
indicators of new sector agencies and suitable benchmarks, and draft associated performance
contracts; (vi) review KSEB’s power system investment plans to identify projects suitable for
ADB financing.
GUJARAT
Gujarat Power Sector To undertake sweeping power sector reforms in Policy Loan Dec 2000 150.0M
Development heavily industrialized western Indian state (CLOSED)
Program19
S. CHANDER Project Loan Dec 2000 200.0M
schander@adb.org (CLOSED)
(South Asia Dept)

10
CLOSED TAs Reorganization Plan for Gujarat Electricity Board; Support to Gujarat Electricity
(approved Dec 1996) 20
Regulatory Commission; Consumer Awareness & Participation in Power Sector
Reforms; Preparation of a Power System Master Plan for State of Gujarat; Financial
Management Support to Kheda & Rajkot Distribution Centers of Gujarat Electricity
Board; Development of a Framework for Electricity Tariffs in Gujarat; Review of
Electricity Legislation and Regulations in Gujarat
POWERGRID CORP OF INDIA LTD
National Power Grid To finance National Power Grid Development MFF – Loan March 2008 600.0M –
Development Program. Project will increase inter-regional OCR
Investment Program - transmission capacity and enhance reliability
Facility Concept and efficiency of inter-state network, including
(Power Grid Upgradation of Transmission Corridor from
Corporation Uttaranchal and 800kV High Voltage Direct
Transmission Project Current North-eastern – Northern/Western Inter-
II) 21 connector. Upgrading transmission corridor from
Uttaranchal.
TOMOYUKI KIMURA Increased transmission capacity and affordable MFF – Loan March 2008 400.0M –
tkimura@adb.org and reliable power (Subproject 1) OCR
(South Asia Dept) MUKHTOR KHAMUDKHANOV (Subproject 1)
mkhamudkhanov@adb.org (South Asia Dept)
Power Grid To help develop India’s national transmission Loan Dec 2004 400.0M –
Transmission III grid, comprising 765 kV and 400 kV transmission OCR
(Sector) 22 lines and associated substations, to improve
system reliability, facilitate interstate and
MUKHTOR interregional power transfers, facilitate
KHAMUDKHANOV development of a national power trading market,
mkhamudkhanov@adb. and hence promote increased private sector
org participation through open access to national
(South Asia Dept) transmission grid. Project represents a 5-year
time slice of POWERGRID’s National
Transmission Development Plan covering 765 kV
and 400 kV transmission lines and associated
substations.
Power Transmission Reform India’s power sector with establishment Loan Oct 2000 250.0M –

11
Improvement II of national grid for interstate power (CLOSED) OCR; 120.0M
(Sector) 23 transmission, at central level to improve -cofinancing
governance by diverting supply of power from
S. CHANDER delinquent states.
schander@adb.org To leverage sector reform at state level, Project designed to differentiate between states
(South Asia Dept) undertaking sector reform from those that are not. Transmission services to delinquent states
will be suspended but states that have implemented power sector reform programs will receive
preference for investment under loan. Through POWERGRID, ADB sought to implement
nationwide power sector reforms. Issues for Policy Dialogue (1) Sector Issues: (a) introduction
of availability based tariff; (b) facilitating State Electricity Board/SEB reforms; (c) financial
strengthening of transmission subsector; (2) Commercialization of POWERGRID: (a)
enhancement of autonomy; (b) commercial borrowings from international money markets; and
(c) PSP in transmission subsector. (With $120M cofinancing from commercial banks using
ADB’s partial credit guarantee)
Private Sector Introduced PSP in 400-kV Meramundali-Jeypore TA Dec 1999 0.6M
Participation in transmission line through a transmission service (CLOSED)
Electricity agreement between POWERGRID and an
Transmission 24 independent power transmission company
(IPTC). A successful bidder comprising a foreign
and a local firm was selected and Central
Electricity Regulatory Commission/CERC’s
approval was obtained for proposed
transmission tariff.
Power Transmission Develop a national grid. POWERGRID to invest Loan Nov 1995 275.0M
Improvement I only in subprojects that would benefit states (CLOSED)
(Sector) 25 with outstanding dues of less than two months
of sales and undertaking sector reforms. Regular
discussions with Government prompted
Government to increase rate of return on
POWERGRID’s equity from 12% to 16%, effective
April 1997.
NATIONAL THERMAL POWER CORPORATION LTD (NTPC)
PPP for Renewable Joint venture company (JVC) to be incorporated Equity April 2009 40.0M
Energy c/o NTPC 26 under Companies Act of 1956 will develop, investment

12
construct, and operate a portfolio of 500MW of
DON PURKA renewable energy projects, initially focused on
dpurka@adb.org wind power and small hydroelectric power. JVC
(Private Sector Operations brings ADB together with leading state-owned
Dept) enterprise in power generation in India and two
of world's top diversified energy companies.
ADB's role in development phase of JVC is
facilitate process and bridge gaps between
parties' risk perceptions and their expectations
from investment in renewable sector in India. As
honest broker, ADB provides direct comfort to
both local and foreign investors through its
proposed equity participation in JVC.
NTPC Capacity A corporate financing facility to be used for Public sector PROPOSED 150.0M
Expansion Financing capital expenditures of power generation plants loan (for
II 27 being developed by NTPC Limited, largest approval
DON PURKA electric power utility in India. 2009)
dpurka@adb.org i) Help India meet long-term power generation needs; ii) leverage foreign currency financing
(Private Sector Operations from syndicated commercial bank and capital/bond markets; iii) strengthen commercial
Dept) financing of state-owned enterprises without requiring Government guarantees. Sub-projects
(run of river hydroelectric) in Uttarakhand state: (1) 520-MW Tapovan-Vishnughad; (2) 600-MW
Loharinag-Pala.
NTPC Capacity NTPC’s operations and expansion plans are Loan July 2006 75.0M –
Expansion Financing critical to reducing peak power demand and Loan;
Facility I 28 energy deficits. NTPC is a financially sound 225.0M –
DON PURKA enterprise with a strong balance sheet, an Complement
dpurka@adb.org effective governance structure and experienced ary
(Private Sector Operations management. Financing
Dept) Scheme
Hydropower Assist NTPC in strengthening feasibility studies TA May 2004 0.8M
Development 29
of Loharinag-Pala and Tapoyan-Vishnugad (CANCELLE
hydropower plants in Uttranchal State. D)
Key activities: (i) review project proposals and other documents to define scope of two
hydropower plants for financing under an ensuing loan; (ii) conduct a technical/engineering

13
review of hydropower plants; (iii) review environmental impact assessment documents and
prepare summaries; (iv) perform financial and economic analysis; and (v) conduct social and
poverty reduction impact assessment and resettlement plans.

POWER FINANCE CORP (PFC)


Energy Efficiency Identify pilot state utilities through screening TA Special Nov 2007 1.0M
Enhancement in the process of clean development mechanism (CDM) Fund
Power Generation eligible projects and verified emission reductions
Sector 30 (VER) deliverable projects in thermal and
NAOKI SAKAI hydropower generation sector. TA will be
nsakai@adb.org provided to power sector entities to renovate
(South Asia Dept) and modernize (R&M) existing power plants
through PFC
State Power Reform Support reforms in selected reform-oriented Loan Dec 2002 150.0M –
Project 31 states and establish independent regulatory (CLOSED: OCR
bodies; unbundle sector entities to make them PARTIALLY
PRODYUT DUTT commercially and operationally autonomous and CANCELLED
pdutt@adb.org efficient, financially viable. PFC will onlend funds )
(South Asia Dept) to SEBs (Karnataka, Maharashtra, Punjab, Tamil - Cancellation
Nadu and West Bengal) and other state-level of $100M
uncommitted
power utilities that make firm commitment to
balance due
institute reforms to make sector operationally to non-
efficient and financially self-sustaining. ADB will availability of
provide loan assistance to selected sub- candidate
borrowers/SEBs, through PFC, to meet part of sub-projects
their financing requirements: (i) transmission from
Karanataka,
and distribution rehabilitation; (ii) transmission
Punjab and
and distribution facilities required for system Tamil Nadu
expansion and reinforcements; and (iii)
renovation and modernization of existing
generating plants.
Power Sector For onlending to 4 core and other eligible sub- Loan March 1992 250.0M
Efficiency Project borrowers. Project achieved its physical (CLOSED)
objectives of investing in transmission,

14
distribution, renovation and modernization of
power plants; resulted in better utilization of the
facilities; reduced technical losses; and
improved power system stability, reduced power
outages, and stabilized frequency fluctuations.
Development objectives were not fully achieved.
Future ADB lending to SEBs through PFC should
be extended only if borrowing states have
embarked on a reform agenda. ADB will
continue state-level support through PFC and
directly with selected state governments.
CLOSED PROJECT Support to Power Finance Corporation (1M TA, Nov 1999)
RURAL ELECTRIFICATION CORP OF INDIA (REC)
Rural Electrification Line of credit to REC without government Public sector Nov 2008 225.0M
Corp of India 32 guarantee, structured as a stand-along Non- loan
VIVEK RAO sovereign Public Sector Financing Facility
vrao@adb.org (NPSFF) to REC for up to $150M, for onlending to
(South Asia Dept) State Electricity Boards and other borrowers
engaged in rural power development.
PRIVATE SECTOR OPERATIONS
Gujarat Paguthan Gujarat Paguthan Wind Energy Financing Private sector April 2008 45.0M
Energy Corporation Facility. Phase I Samana wind energy facilities loan (Paguthan);
Private Limited in Gujarat with a total installed capacity of 60.0M (CLP)
(GPEC) 33 50.4MW.
SHANTANU CLP Wind Farms Pvt. Ltd. Samana (Phase II)
CHAKRABORTY and Saundatti Wind Power Project involves
schakraborty@adb.org construction and operation of 82.4 MW of wind
(Private Sector Operations power generation facility (103 units of 800
Dept) kilowatts each)
Tata Power Company Mundra Ultra Mega Power Project - Private sector April 2008 450.0M
Ltd 34 Construct, operate, and maintain a 4,000 MW loan [Cofinancing
coal-fired power plant (5 units of 800 MW each) from KEXIM]
TAKEO KOIKE on a build-own-operate basis in Gujarat,
tkoike@adb.org incorporating supercritical technology which

15
(Private Sector Operations improves thermal efficiencies and reduces
Dept) emissions.
Project planned as one of ultra mega power projects (UMPPs); generated power to be supplied
to Gujarat, Maharashtra, Punjab, Haryana, Rajastan. It is expected to be first in a series of large
energy-efficient power plants in India under Government's "Power for All" plan to provide
reliable and quality access to power by 2012. Also help promote private investment in energy
sector by providing a good example of building and financing large-scale power projects
through public-private partnerships. Imported coal will brought to Project site thru development
of jetty, unloading and handling of imported coal, transportation to site. Necessary
infrastructure for utilization of sea-water for in-plant water requirements will be built, including
intake and discharge location in sea-water intake pipeline and desalination plant. Project will
be one of first private sector generators in India to apply supercritical technology. In March
2009, Mundra UMPP won two top-tier project finance awards: Euromoney PLC's Project Finance
Magazine and Project Finance International, a Thomson Reuters publication, have given Mundra
project their Asia Pacific 2008 Power Deal of the Year award. A risk participation arrangement
between ADB and Export-Import Bank of Korea (KEXIM) spurred $1 billion in debt financing from
Republic of Korea, providing a significant contribution to completion of project's financing. 35
Tata Power Wind Energy Financing Facility Private sector April 2007 79.26M
– Loan aims to demonstrate successful loan (Rs3.52B)
implementation of large-scale wind power (without govt
projects by private sector; and facilitate guarantee)
commercial cofinancing of at least $50M.
To assist power projects by Tata Power: (i) Khandke Wind Power Project involves construction
and operation of 50.4 MW of wind power generation facilities and a 30-132 kilovolt (kV)
substation at Khandke village, and a 4 km transmission line to nearest line-in-line-out point on
132 kV transmission lines of Maharashtra State Electricity Transmission Company
Limited/MSETC. (ii) Bramanvel Wind Power Project involves construction and operation of 50
MW of wind power generation facilities and a 30-220 kV substation at Bramanvel village, and a
35 km transmission line to nearest 220 kV substation of MSETC.
Tata-Delhi Power Transmission (TDTL) – Private sector Jan 2003 62.24M –
Construct and operate 1,113 km of 400 kV, Loan
double circuit (D/C) power transmission lines
about 20 km of 220 kV D/C power transmission
lines from Siliguri, West Bengal to Mandaula
near Delhi.

16
Transmission lines will have a maximum load capacity of 3,000 MW (1,500 MW per circuit) and
an average load capacity of 880 MW. TDTL is a joint venture between Tata Power and
POWERGRID. Project will evacuate power from Tala Hydro Electric Power Project in Bhutan and
transfer surplus power from India’s eastern region to power-deficit northern region. Project is
ADB’s first private sector power transmission project. Success of project expected to induce
stronger flows of private investments to Indian power transmission sector.
Dahej LNG Terminal Petronet LNG Limited (PLL) owns and operates Private sector Aug 2006 150.0M –
Expansion Project 36 India’s first liquefied natural gas (LNG) import Loan Loan
and regasification terminal, which started
SHANTANU commercial operations in April 2004. Its
CHAKRABORTY production has reached full capacity of 5 million
schakraborty@adb.org metric tons per annum (MMTPA) since March
(Private Sector Operations 2005. PLL will expand its terminal to 10 MMTPA
Dept) of capacity by 2009 to fill demand-supply gap.
Dahej LNG terminal expansion will provide example of good practice in public-private
partnership in infrastructure development. PLL imports LNG from Ras Laffan Liquefied Natural
Gas Company Limited (II) (Rasgas) in Qatar. PLL regasifies LNG and sells to GAIL (India) Ltd,
Indian Oil Corporation Ltd (IOC) and Bharat Petroleum Corporation Ltd (BPCL). GAIL, IOC, and
BPCL in turn sell gas to industrial end users. In 1997, ADB provided TA for study on setting up
LNG terminal on a public-private partnership. Based on study, four Indian energy majors, GAIL
(India) Limited, Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Oil
and Natural Gas Corporation Limited formed Petronet. Gaz de France, world’s fourth largest
buyer of natural gas, joined as another major shareholder to provide technical support to
Petronet. In 2004, ADB injected equity in Petronet to hold 5.2% stake.
Torrent Power Construction and operation of 1,095-MW gas- Private Sector Nov 2004 54.36M –
Generation Ltd fired combined-cycle power plant at Surat (CANCELLE Loan;
(TGPL) 37 District, Gujarat. Power plant will be fueled on D in Oct 20.64M –
natural gas to be supplied under a long-term gas 2005, Equity
KURUMI FUKAYA supply agreement. Project will sell power to before investment
kfukaya@adb.org Surat Electricity Company Ltd (SEC), Ahmedabad financial
(Private Sector Operations Electricity Company Ltd (AEC), and Power closing)
Dept) Trading Corporation of India Ltd (PTC) under
long-term power purchase agreements. Project
to begin commercial operations in November
2006; TGPL, a special purpose company,

17
established to implement Project.
Balagarh Power Co. Third CESC - ADB’s third project involving Private Sector 1996 $15.0M –
Ltd. (BPCL) 38 CESC/RPG group, to build 500-MW coal-fired (without govt Equity
thermal power station comprising two 250 MW guarantee) investment;
units on an island in Hugli river 70 kms north of $25.0M –
Calcutta; to be operational in mid-2000. Notable Loan;
as first power scheme financed without $100.0M -
Government guarantee, project is 35% owned by Cofinancing
CESC Limited, a licensee to generate and
distribute electricity in Calcutta. CESC is also a
unit of RPG Group, India’s fifth largest industrial
group. BPCL will build, own and operate power
plant for 30 years, selling power to CESC. ADB’s
presence and support of International Finance
Corporation (World Bank) designed to promote
participation by other international financial
investors and lenders.
Calcutta Electricity Second CESC – A 500 MW expansion project Private sector Dec 1991 32.0M
Supply Company connecting the power station to 132-kV Loan (CLOSED)
(CESC) 39 transmission network Augment CESC’s
generation capacity: (i) increase power supply
SHANTANU over next ten years to industry which is a
CHAKRABORTY primary customer of CESC; (ii) improve quality of
schakraborty@adb.org life style due to more assured availability of
(Private Sector Operations power; (iii) support expansion of private sector
Dept) in an area traditionally dominated by public
sector. Project sponsor is GOENKA Group.
First CESC - Augmentation of transmission Private sector Oct 1990 17.8M
system. Sponsor is GOENKA Group Loan (CLOSED)
CLOSED PROJECT 40
Solicitation of Private Sector TA Dec 1996 0.375M
Implementation of Chhara Combined Cycle (CLOSED)
Power

OTHERS

18
Integrated Ministry of New and Renewable Energy plans to Loan - MFF PROPOSED 200.0M -
Renewable Energy conduct three types of solar energy pilot (for OCR
Development projects taking a innovative public-private approval
(Facility Concept) 41 partnership (PPP) approach, i.e., (i) 25 MW Solar May 2010)
NAOKI SAKAI Thermal Power Plants, (ii) 25 MW Solar
nsakai@adb.org Photovoltaic (SPV) Power Plants, and (iii)
(South Asia Dept) Bundled small grid-connected roof-top SPV
projects at government building.
India Infrastructure Line of credit to government-owned India MFF – Loan; Dec 2007 500.0M –
Project Financing Infrastructure Finance Co. Ltd. (IIFCL) in multiple [Subproject 1] OCR
Facility tranches over next four years, for onlending to [300.0M –
(IIPFF) I 42 infrastructure projects (transport, power, urban Subproject
infrastructure, gas pipelines, infrastructure 1]
CHEOLSU KIM projects in specialized economic zones, and
ckim@adb.org international convention centers, tourism-
(South Asia Dept) related). Infrastructure projects must conform to
IIFCL’s operating paradigm which requires IIFCL
to emphasize public-private partnership
initiatives.
National Hydropower To support National Hydropower Development TA – United April 2007 0.495M
Development Investment Program (NHDIP) Kingdom Grant
Corporation (NHDC) (i) Feasibility studies for NHDIP and technical, economic, financial, and safeguard due diligence
Capacity Development documents; (ii) identification of institutional development, financial management, and capacity
43
development program for NHPC; (iii) identification of resettlement and land acquisition
PRATIMA DAYAL requirements; (iv) disclosure of such information to affected people; (v) completion of
pdayal@adb.org willingness-to-pay study for electricity tariff; (vi) completion of field surveys and preliminary
South Asia Dept)
designs.
Capacity Building for TA will provide broad-based institutional TA – Dec 2004 0.7M
Clean Development development, technical, and training support to Cooperation (CLOSED)
Mechanism (CDM) in address capacity building needs of various Fund Climate
India 44 stakeholders in Indian CDM market and follow a Change
NAOKI SAKAI learning-by-doing approach. India had ratified
nsakai@adb.org Kyoto Protocol in August 2002 and established in
(South Asia Dept) Dec 2003 an inter-ministerial National Clean
Development Mechanism Authority, involved in

19
both regulatory and promotional roles and aims
to create an enabling environment for
developing a healthy and competitive CDM
market in India.

20
REFERENCES:
(TAR – Technical Assistance Report; TACR – TA Completion Report; RRP – Report and
Recommendation of ADB President to ADB Board prior to loan approval; PCR – Project
Completion Report)

21
1
North East Region Power Development Project
http://www.adb.org/Documents/PIDs/38312013.asp; TAR (Dec 2004)
http://www.adb.org/Documents/TARs/IND/tar-ind-38312.pdf

2
Assam Power Sector Enhancement Investment Program (Facility Concept)
http://www.adb.org/Projects/project.asp?id=41614
3
Assam Power Sector Development Program http://www.adb.org/projects/project.asp?
id=36318
4
Institutional Development for Rural Electrification
http://www.adb.org/Projects/project.asp?id=36326; Reorganization of Assam State
Electricity Board http://www.adb.org/Projects/project.asp?id=36326; Policy and Legal
Support for Power Sector Reforms http://www.adb.org/Projects/project.asp?id=36326;
Building Capacity of Assam Electricity Regulatory Commission
http://www.adb.org/Projects/project.asp?id=36323

5
Capacity Building for Himachal Pradesh Power Sector Agencies
http://www.adb.org/Projects/project.asp?id=41611

6
Himachal Clean Power Development (Facility Concept)
http://www.adb.org/Projects/project.asp?id=41627

7
Capacity Development of Bihar State Power Sector Agencies (Bihar Electricity
Regulatory Commission) http://www.adb.org/Projects/project.asp?id=41612

8
Bihar Power Sector Development Program http://www.adb.org/Projects/project.asp?
id=41626

9
Developing the Power System Master Plan for Bihar
http://www.adb.org/Projects/project.asp?id=42054

10
Jammu and Kashmir State Clean Power Development
http://www.adb.org/Projects/project.asp?id=41593

11
Madhya Pradesh Power Sector II (Investment Program)
http://www.adb.org/projects/project.asp?id=32298

12
Madhya Pradesh Power Sector Development Program
http://www.adb.org/projects/project.asp?id=29473
13
Development of a Transfer Scheme for Madhya Pradesh Power Sector Reform
http://www.adb.org/Projects/project.asp?id=36126; TACR (Nov 2005)
http://www.adb.org/Documents/TACRs/IND/36126-IND-TACR.pdf; Strengthening Consumer
and Stakeholder Communication for Madhya Pradesh Power Sector Reform
http://www.adb.org/Projects/project.asp?id=35042; Legal Support for Madhya Pradesh
Power Sector Reform Legal Support for Madhya Pradesh Power Sector Reform
http://www.adb.org/Projects/project.asp?id=36153

14
Energy Smart-Facilitating the Operations of Energy Conservation Fund in Madhya
Pradesh http://www.adb.org/Projects/project.asp?id=41681

15
Uttaranchal Power Sector Project (Facility Concept)
http://www.adb.org/Projects/project.asp?id=37139
16
Uttaranchal Power Sector Capacity Building http://www.adb.org/projects/project.asp?
id=39106
17
Development of a Framework for Electricity Tariffs in Andra Pradesh
http://www.adb.org/Projects/project.asp?id=29056
18
Kerala Power Sector Development Program http://www.adb.org/projects/project.asp?
id=31393
19
Gujarat Power Sector Development Program http://www.adb.org/projects/project.asp?
id=29694
20
Preparation of a Power System Master Plan for State of Gujarat
http://www.adb.org/projects/project.asp?id=30139; Financial Management Support to
Kheda & Rajkot Distribution Centers of Gujarat Electricity Board
http://www.adb.org/Projects/project.asp?id=30141; Development of a Framework for
Electricity Tariffs in Gujarat http://www.adb.org/Projects/project.asp?id=30140; Review
of Electricity Legislation and Regulations in Gujarat
http://www.adb.org/Projects/project.asp?id=30142

21
Power Grid Corporation Transmission Project II
http://www.adb.org/projects/project.asp?id=39630

22
Power Grid Transmission III http://www.adb.org/projects/project.asp?id=38492

23
Power Transmission Improvement II http://www.adb.org/projects/project.asp?id=32107
24
Private Sector Participation in Electricity Transmission
http://www.adb.org/Projects/project.asp?id=32508; TACR (Dec 1999)
http://www.adb.org/Documents/TARs/IND/R32-00.pdf

25
Power Transmission Improvement I (Sector) PCR (Sep 2005)
http://www.adb.org/Documents/PCRs/IND/pcr-ind-24273.pdf

26
PPP for Renewable Energy c/o NTPC http://www.adb.org/Projects/project.asp?id=42922

27
NTPC (National Thermal Power Corporation Ltd.) Capacity Expansion Financing II
http://www.adb.org/Projects/project.asp?id=41904
28
NTPC Capacity Expansion Financing Facility I http://www.adb.org/Projects/project.asp?
id=39916
29
Hydropower Development http://www.adb.org/projects/project.asp?id=38010

30
Energy Efficiency Enhancement in the Power Generation Sector
http://www.adb.org/Projects/project.asp?id=41139

State Power Reform Project http://www.adb.org/projects/project.asp?id=31324;


31

Support to Power Finance Corporation http://www.adb.org/projects/project.asp?id=31394

32
Rural Electrification Corp of India http://www.adb.org/Projects/project.asp?id=42915

33
Gujarat Paguthan Energy Corporation Private Limited (GPEC)
http://www.adb.org/Projects/project.asp?id=42902

34
Mundra Ultra Mega Power Project http://www.adb.org/Projects/project.asp?id=41946;
Tata Power Wind Energy Financing Facility http://www.adb.org/Projects/project.asp?
id=41900; Tata-Delhi Power Transmission (TDTL)
http://www.adb.org/projects/project.asp?id=36915

35
ADB's Mundra Mega Power Project Wins Two Key International Finance Awards
3 March 2009 http://www.adb.org/Media/Articles/2009/12812-indian-electricities-
projects/

36
Dahej LNG Terminal Expansion Project http://www.adb.org/Projects/project.asp?
id=39921
37
Torrent Power Generation Ltd http://www.adb.org/projects/project.asp?id=38907
38
Balagarh Power Co. Ltd. (BPCL) ADB News release: ADB Finances Private Sector Power
Project in India For Calcutta (Dec 1996)
39
Second CESC http://www.adb.org/Projects/project.asp?id=24721 First CESC
http://www.adb.org/Projects/project.asp?id=23706
40
Solicitation of Private Sector Implementation of Chhara Combined Cycle Power
http://www.adb.org/projects/project.asp?id=29464

41
Integrated Renewable Energy Development (Facility Concept)
http://www.adb.org/Projects/project.asp?id=41613
42
India Infrastructure Project Financing Facility I
http://www.adb.org/Projects/project.asp?id=40655

43
National Hydropower Development Corporation (NHDC) Capacity Development
http://www.adb.org/Projects/project.asp?id=39654
44
Capacity Building For Clean Development Mechanism in India
http://www.adb.org/Projects/project.asp?id=38496