India’s National Power Grid Development Investment Program, supported by the Asian Development Bank (ADB), was designed to increase transmission capacity and affordable and reliable power supply for sustained economic growth. It sought to strengthen, augment, and expand the national power grid; remove bottlenecks from the transmission system; and reduce losses to overall improve the quality of supply in the major demand centers of the northern and western regions of the country. Its envisaged impact was promotion of sustainable social and economic prosperity and growth in the country. With an estimated cost of $2,542.6 million, its expected outcome was enhanced transmission network, reliability, and efficiency.
The multitranche financing facility (MFF) supporting the program was approved by ADB in March 2008 for up to $600 million. At appraisal, the facility was to have two outputs delivered through tranches 1 and 2. Output 1 was to comprise a transmission arrangement for the evacuation and reliable transfer of hydropower generated in the Tehri Valley in Uttarakhand to the northern region. Output 2 was to consist of ±800 kilovolt (kV) high-voltage direct current (HVDC) northeastern–northern/western interconnector for delivering bulk power generated at hydropower plants in the northeastern region and Bhutan to power-deficit areas of the northern and western regions. Tranche 1 of $400 million was approved in March 2008 and tranche 2 of $200 million followed in March 2009.
However, in December 2008, at the request of POWERGRID, output 1 was canceled because the associated hydroelectric plants (HEPs) in Uttarakhand were behind schedule. The approved funds were redirected to additional packages under output 2. An additional tranche 3 of $76 million was also approved in December 2011 from the tranche 2 loan surplus to partly finance the construction of new substations, installation of new transformers at existing substations, and construction of transmission lines in the western and northern regions. Even with the cancellation of ADB financing for output 1, the government continued with the completion of the expected investments through its own resources. Most of the MFF output targets were consequently delivered, with the MFF achieving or overachieving all of its four outcome targets.
At MFF completion, availability of the transmission system was greater than the 99% target and transmission losses were maintained at 3%–4%, which is at par with international standards. The facility’s outcome target of an additional 60,000 circuit-kilometer (ckm) of transmission lines was more than achieved, with 67,854 ckm added to the national power grid during 2008–2016. Interregional transmission capacity increased to 59,650 MW in March 2016, which substantially exceeded the target of 37,000 MW at completion. Moreover, the length of national power grid transmission lines increased to 148,149 ckm in March 2018, although the MFF’s contribution to the increase has been marginal. Similarly, while marginal, the facility also contributed to increasing the country’s interregional power transmission capacity to 86,450 MW as of March 2018. It helped improve transmission network reliability and efficiency by establishing an HVDC transmission link between the northeastern and eastern regions, and the northern and western regions.
Overall, the MFF and tranche 3 have thus contributed to enhancing the access to electricity of rural households in India and building a robust national grid with enhanced interregional power transfer capacity. The MFF and tranche had POWERGRID as the executing agency. The POWERGRID set up a program management unit to take charge of day-to-day implementation.
