PGCIL will spend Rs. 1 Lakh crore for network expansion

Power Grid Corporation of India(PGCIL), the nation's biggest electricity transmission company, said it will spend Rs 1 lakh crore ($22 billion) to more than double the size of its network as utilities build additional plants. The state-owned company plans to add 80,000 kilometers of lines in seven years compared with the current network length of about 77,000 kilometers, I S Jha, director of projects, said in an interview in New Delhi.

Power Grid, which plans to raise Rs 3,500 crore selling shares this year to fund expansion, is also building transmission lines connecting neighbouring countries. Utilities plan to nearly double generation capacity  in the next seven years as the world's second fastest growing major economy builds up its infrastructure. "Current transmission capacity is not enough to support the generation capacity and lines need to be added quickly," said Anuj Upadhyay, a Mumbai-based analyst.
The company, based in Gurgaon near New Delhi, will increase spending 23% to Rs 12,900 crore in the year ending March to add 7,500 kilometers of lines, he said.Power Grid typically borrows 70% of project costs from domestic lenders, Jha said. World Bank and Asian Development Bank also lend money, he said.

Power Grid is building a 500Mw transmission line from eastern India to Bangladesh, Jha said. The company is in talks to set up lines to Sri Lanka and Nepal and increase the capacity of an existing line from Bhutan, he said, without giving details because the plans are preliminary.India plans to add 78,000Mw generating capacity in the five years ending March 2012 and 100,000Mw in the following five years to meet demand."There is all this capacity coming up and then there is huge demand," Jha said. "Power from remote areas needs to be brought to demand centers in north and west India."