The Government of India today signed a loan agreement with the Asian Development Bank (ADB) for $208 million for Tranche 3 of this Investment programme titled 'Himachal Pradesh Clean Energy Development Investment Program'. This Facility is for a series of loans to provide funding for four run-of-river hydropower projects totaling 856 MW in Himachal Pradesh, for an amount of $ 800 Million from ADB. This particular loan provides partial funding for stages II & III of the Integrated Kashang Hydroelectric Project totaling 195 MW located in District Kinnaur, and for the 100 MW Sainj Hydroelectric Project located in District Kullu. 

Himachal Pradesh has abundant water resources, with five major rivers flowing from the western Himalayas. Its power generation potential is about 23,000 MW - about one fourth of India's total hydropower potential - out of which about 6,480 MW has been developed. Recognizing the state's comparative advantage, the state government in 2006 approved a hydropower policy that aims to make Himachal Pradesh the "hydropower state" of India. 

Shri Venu Rajamony, Joint Secretary (MI), Department of Economic Affairs, Ministry of Finance, signed the loan on behalf of the Government of India (GOI). Mr. Venu Rajamony said on the occasion, "We appreciate ADB's support to this project. This is part of GOI's priority to supply clean renewable energy power projects. We look forward to successful completion of the project. The Himachal Pradesh Power Corporation, the Implementing Agency for this project is also taking the lead in development and accreditation of its project for availing carbon credits as part of the Clean Development mechanism under the UNFPCC. We also look forward to development and realization of Clean Development Mechanism (CDM) benefits by the project authorities." 

"Himachal Pradesh's focus on hydropower development is vital to meet all in-state demand by providing affordable, reliable power to its residents as the state currently meets only about 50% of its power demand through its own power generating capacity. Harnessing this hydropower will also enable the export of excess power to the rest of the country for the benefit of power deficient states. Himachal Pradesh's focus on clean energy development will provide jobs to state residents and will further the country's goal of meeting its energy needs through treading a low carbon path," said Mr. Andrew Jeffries, a Senior Energy Specialist at ADB's South Asia Department. 

The Executing Agency for the loan program is the Multi-purpose Projects & Power Department of the Government of Himachal Pradesh, and Himachal Pradesh Power Corporation Ltd. is the Implementing Agency. These two projects are expected to be completed by 2016.  Clean energy loan financing supports hydropower project construction and carbon credit accreditation under a multilateral investment programme. A multilateral loan tranche provides partial funding for specified stages of the Integrated Kashang Hydroelectric Project and for the Sainj Hydroelectric Project as part of a larger facility to finance run-of-river hydropower projects, to be executed by the state multipurpose projects and power department and implemented by the state power corporation, with project designs pursuing Clean Development Mechanism accreditation and an anticipated completion timeline.