WB’s $200 Mn loan to help raise renewable energy share in Himachal

at 9:28 pm
power sector
Representational/file image

New Delhi: Helped by a loan of 200 Million USD from the World Bank, a major programme will be undertaken in the mountainous Himachal Pradesh state of India to reform its power sector by increasing the share of renewable energy in its electricity generation.

To this effect, an agreement was signed today by the Government of India, the Government of Himachal Pradesh and the World Bank.

The Himachal Pradesh Power Sector Development Programme will contribute to the state’s aim of adding 10,000 megawatts of additional renewable energy (RE) capacity to make the state’s power supply greener, according to a press statement issued by the World Bank here.

“Himachal Pradesh (HP) aims to become a ‘Green State’ by meeting 100 percent of its energy needs through renewable and green energy by 2030,” it said.

HP currently meets more than 80 percent of its energy demands from hydropower, the release said.

The World Bank-supported programme is aimed at enhancing the utilization of HP’s existing RE resources, including hydropower, and help to diversify its RE resources further, it said.

For instance, it will add 150 megawatts of solar capacity in the state, reducing greenhouse gas emissions by more than 190,000 metric tons per year, the release said.

The agreement was signed by K Manicka Raj, Joint Secretary in the Union Department of Economic Affairs, Harikesh Meena, Director (Energy) on behalf of the Government of Himachal Pradesh; and Auguste Tano Kouame, Country Director (India) of the World Bank.

“The Program will boost local economic activity while replacing fossil-fuel based energy consumption with green energy,” said Kouame.

“Moreover, the Program will support HP to set up a single energy trading desk, thus enabling the sale of surplus hydropower to other states,” he said.

More importantly, the Program will provide a template for the Indian power market for underwriting new investments in renewable energy, the release said.

In Himachal’s hilly terrain where challenges in maintaining uninterrupted power supply are higher – and restoration in case of a breakdown may take longer than elsewhere – the Program will help achieve a strengthened transmission and distribution grid.

It will introduce advanced technologies such as a demand response management system and seamless access to RE.

This is critical during peak load periods when the state must otherwise rely on expensive fossil-fuel based power.

The introduction of automated systems will be an important step towards providing clean, reliable 24×7 power supply to citizens, reduce power outages, and minimize consumer complaints.

The Program will help strengthen environmental, social, financial management, corporate governance, and procurement capabilities of the state’s power sector utilities and agencies.

The $200 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 14.5 years including a grace period of 4.5 years.