India

India

Asian Development bank finances two 50 MW wind farms

The Asian Development Bank (ADB) has agreed to provide Tata Power, India's largest private power utility, with a loan worth up to $79.3 million, without government guarantee, for its two 50 MW wind farms in Maharashtra. The Khandke project in Ahmednagar district employs Enercon 800 kW units and is due online shortly, while the Bramanvel wind farm of Suzlon 1.25 MW turbines in Dhulia district was fully online at the end of March. The Indian Renewable Energy Development Agency (IREDA) is co-financing the ADB loan, providing up to $22 million. The term of the loan is up to 13 years with a fixed interest rate. Ajay Sagar, ADB's head of private sector finance, says discussions are underway with others keen to tap the ADB for wind financing, but no further proposal is in the processing stage. The tendency for investors to look at wind energy in India as a tax shelter remains high, he notes. "ADB does not support this," he says, stressing ADB prefers post construction financing so completion risks are taken out. "Our job is to promote long term financing and not to compete with banks. Because the credit rating and governance of the Tata Power group is high, ADB chose to grant it the loan." ADB's Takeo Koike says the two Tata projects will contribute to a reduction of emissions amounting to around 2.6 million tonnes of carbon dioxide during the minimum project life of 20 years. Meanwhile, Tata is expected to award a further 50 MW order to Enercon shortly.

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