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Tamil Nadu gets Rs 587 crore loan from German bank

According to reports, German development bank KfW has sanctioned a loan of 76 million euros (587crore) to the Tamil Nadu government for setting up inter-state transmission lines.

This is part of the green energy corridors project under Indo-German bilateral development cooperation. The project in the power sector aims to create transmission infrastructure in the renewable energy potential rich states and facilitate evacuation of renewable energy into the national grid. The agreement was signed in New Delhi on Wednesday.

On the occasion, three separate loan agreements were also signed for GEC project amounting to 625 million euros. Rajesh Khullar, joint secretary, department of economic affairs, signed loan agreements with German government’s development bank KfW, for loan of 76 million euro to the government of Tamil Nadu and a loan of 49 million euros to government of Rajasthan for intra-state transmission schemes. Power Grid Corporation of India Limited signed loan agreement for 500 million euros with KfW for inter-state transmission schemes.

The activities envisaged in the Tamil Nadu project are establishment of 400kV grid sub-station at Thannampatty in western Tamil Nadu; augmentation of various 230 kV grid sub-stations and associated transmission systems. The project is proposed to be completed within three years.”

Of the total cost, the German bank loan will be 40%, another 40% will be granted by National Clean Energy Fund and TNEB will have to pitch 20%,” said a TNEB official.On December 10, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the creation of the intra state transmission system in Tamil Nadu. The intra-transmission system in the state will be created by 2016-17 for evacuation of renewable power.Tamil Nadu is a state where large number of wind projects is already working or under installation and the existing power transmission infrastructure is insufficient to cater to the existing and new renewable energy installations.

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