$451 million ADB loan to strengthen power connectivity in Tamil Nadu


The Asian Development Bank (ADB) and the Government of India have signed a $451 million loan agreement to strengthen power connectivity between the southern and northern parts of the Chennai–Kanyakumari Industrial Corridor in Tamil Nadu.

The state government is aiming to develop the northern Chennai–Tiruchirappalli area of Chennai–Kanyakumari Industrial Corridor as a manufacturing center while targeting the relatively poor southern Madurai–Thoothukudi portion for the development of renewable energy-based power generation because of the availability of wind and solar resources.

The project will help establish extra-high-voltage transmission link between Virudhunagar and Coimbatore to transfer the additional generation capacity of 9 GW, including 6 GW from renewables, by 2025 to meet the increased power demand in the Chennai–Kanyakumari Industrial Corridor. This will help reliably evacuate power from these new power plants in the southern Chennai–Kanyakumari Industrial Corridor.

The Chennai–Kanyakumari Industrial Corridor is part of the East Coast Economic Corridor, in which ADB is the lead developing partner of the Government of India.

“The project will help Government of Tamil Nadu meet the increasing demand for power supply from industry and commercial enterprises in the State through transfer of power from new generation facilities, including renewable energy, in the southern Chennai–Kanyakumari Industrial Corridor to the industrial hubs in the state’s northern region,” said Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs in India’s Ministry of Finance after signing the loan agreement.

“The project will provide an impetus to the industrial development of Chennai–Kanyakumari Industrial Corridor, which ADB has been assisting through strategic planning and investments in infrastructure while facilitating industrial investments. They are expected to enhance industrial competitiveness while creating well paid jobs to support the state’s rapid economic transformation,” said Kenichi Yokoyama, Country Director of ADB’s India Resident Mission.

The project will also build the operational capacity of TANTRANSCO, the state-owned company responsible for transmission, by supporting a financial restructuring plan, better facilities and work environment for women workers, and improved monitoring system for social and environmental impacts. To support this end, ADB has approved a complementary technical assistance grant of $650,000.

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