KfW: EUR 1 billion for new power lines in India - high potential for renewable sources of energy

• Ecologically sustainable energy supply in India
• World's fifth-largest electricity producer is building new power lines
• Opportunities for private investors in the expansion of the network infrastructure

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), the business area KfW Development Bank today concluded a EUR 500 million loan agreement with the Indian power transmission company Powergrid for the construction of new power lines. This is the first component of the project for expanding the Indian electricity network, for which KfW is providing a total of EUR 1 billion. As part of the project, the construction of so-called "green corridors" will be financed. These new transmission lines will feed the electricity obtained from renewables into the public network.

At the same time, contracts were signed with the Indian government for expanding the network in Rajasthan and Tamil Nadu. The power lines will be financed by two loans totalling EUR 125 million extended to the transmission companies in these federal states. Together with Powergrid's national lines, they will strengthen the entire network in India. Electricity will thus be transported more effectively in future. This reduces network losses and improves the carbon footprint.

"The demand for electricity in India is growing continuously. 25% of India's population, which equates to 300 million people, still has no access to electricity. This represents a significant obstacle to continuous economic growth and to reducing poverty in the subcontinent. In view of the great potential for renewable sources of energy, the expansion of the electricity transmission networks for alternative energies is the order of the day", commented Dr Norbert Kloppenburg, Member of the Executive Board of KfW Group.

The share of renewable energies in the Indian electricity mix should be expanded to 15% by the year 2020. This goes hand in hand with a considerable decline in CO2 emissions. However, the end user can only access the "green energy" - that is derived in particular from solar and wind power - provided a stable and efficient transmission network is in place. 90% of renewable sources of energy are found in only seven federal states (Gujarat, Andra Pradesh, Himachal Pradesh, Maharashtra, Karnataka, Rajasthan and Tamil Nadu) and are a long distance from the large economic centres having a high electricity consumption. It is therefore essential to expand the network infrastructure within the scope of one of the most ambitious projects worldwide.

Further information on the business area KfW Development Bank can be found at

www.kfw-entwicklungsbank.de