Multilateral funding agency ADB on Monday said it proposes to subscribe non-convertible debentures worth Rs 150 crore of Tata Power Delhi Distribution Ltd (TPDDL), to enhance Delhi's power distribution through grid enhancements.
Besides, Asian Development Bank (ADB) agreed to provide USD 2 million grant to partially finance the purchase and integration of a pilot battery energy storage system (BESS), a statement by Manila-based funding institution said.
The senior secured financing will be used to commission a new 66/11-kilovolt grid, augment and expand transformers, substations, feeder lines, and switching stations, install smart meters, and replace obsolete electrical equipment and meters, it said.
The 10-megawatt-hour (MWh) BESS is South Asia's first grid-scaled energy storage project at the distribution transformer level, it said.
It will enable electricity to be stored and delivered on demand, reducing grid instability, and providing the flexibility to integrate intermittent solar and wind energy resources, it said.
The grant to finance the BESS is provided by Goldman Sachs and Bloomberg Philanthropies' Climate Innovation and Development Fund (CIDF) and administered by ADB, it added.
"Power distribution is a crucial link in the electricity supply chain, and at times one of the most vulnerable. Mainstreaming a battery energy storage system at the distribution transformer level will better integrate renewable energy sources and contribute to a more disaster-resilient power distribution system for Delhi," said ADB's Director General for Private Sector Operations Suzanne Gaboury.
As Asia's Climate Bank, ADB supports India's climate goals through innovative technologies and the catalyzing of private capital to finance green projects, Gaboury said.
The BESS plays a crucial role in building a resilient grid and paves the way for a future-ready power distribution network.
In 2022, the power ministry targeted battery storage capacity of 4 per cent of total electricity consumption by 2030. To reach that goal, India would need a total battery energy storage capacity of 182 gigawatt-hours by 2030.
ADB's financing through CIDF for the pilot BESS will provide proof of concept and lessons learned by TPDDL to implement a planned additional 50 MWh of BESS capacity. TPDDL is the distribution arm of Tata Power.
Launched in September 2021, CIDF is a blended finance facility managed by ADB, established with an initial USD 25 million philanthropic commitment from Bloomberg Philanthropies and Goldman Sachs, it said.
The fund has the potential to unlock up to USD 500 million in private sector and governmental investments in support of sustainable low-carbon economic development and help catalyze a clean energy transition in South and Southeast Asia, it added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
