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Asian bank approves India hydro funding, earmarks first two projects

The Asian Development Bank (ADB) has approved an US$800 million, eight-year hydropower loan package to India's Himachal Pradesh State, including first-tranche financing of the 111-MW Sawra Kuddu and 65-MW Kashang 1 hydropower projects.

Since early this year, ADB has been considering lending the money to Himachal Pradesh under the MFF (Multi-Tranche Financing Facility) Himachal Clean Power Development program. (HNN 2/7/08)

Originally, ADB said the four run-of-river projects to be developed totaled 856 MW: 111-MW Sawra Kuddu on the Pabbar River; 243-MW Integrated Kashang (including Kashang Stages 1-3) on the Kashang River; 100-MW Sainj (or Sanj) on the Sainj River (HNN 8/21/08); and 402-MW Shongtong Karcham (or Songtong Karcham) on the Satluj River. (HNN 10/24/08) In its October 23 announcement, ADB said the plants in the program now total 808 MW, but gave no explanation of the capacity reduction.

ADB and the Himachal Pradesh government confirmed they identified Sawra Kuddu and Kashang 1 as two projects ready for financing through the first loan tranche of US$150 million. The loan has a 25-year repayment period.

The overall cost of the projects is US$1.5 billion, with US$800 million coming from ADB, US$450 million from the state government, and US$250 million from other financial institutions.

Initial solicitations already have been issued for consultants, construction, or equipment work for various aspects of the four projects. Information on the program is available on the ADB Internet site at www.adb.org/projects/project.asp?id=41627.

The ADB project officer is Andrew Jeffries, Energy Division, SARD, Asian Development Bank, P.O. Box 789, 0980 Manila, Philippines; (63) 2-6325319; E-mail: ajeffries@adb.org; Internet: www.adb.org.

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