World Bank approves USD 180-mn loan for power plants in India

The World Bank today approved a USD 180-million loan for the renovation and modernisation of old, polluting and inefficient coal-fired power plants in India, in a move that could help lower carbon emissions.

"The project, which is expected to lower carbon emissions and boost power production at these plants, is co-financed with a USD 45.4-million grant from the Global Environment Facility (GEF)," the funding agency said in a statement.

This would be the first step in a decade-long Indian plan to augment power supply by rehabilitating a range of old coal-fired plants even as the country moves to more climate-friendly options for energy generation in the long term, the World Bank said.

With the proposal, around 200-220 MW capacity each of the three coal-fired power plants at Bandel in West Bengal, Koradi in Maharashtra, and Panipat, Haryana will be modernised. "If scaled up effectively to the remaining similar units needing rehabilitation, India could be looking at emissions cuts anywhere between 10 to 13 million tonnes of CO2 equivalent each year," Mikul Bhatia, World Bank Energy Specialist and project team leader, said.

Currently, around 80 per cent of the electricity supplied to homes, farms and factories in India come from coal-fired generation plants, one-third of which are old, inefficient, and emit harmful gases into the atmosphere, it said.

It has been designated the first phase of India's National Renovation and Modernization Program which, over the next decade, aims at rehabilitating old and inefficient power plants with a cumulative capacity of 27,000 MW, or almost one-fifth of India's installed power capacity of 145,000 MW.

The planned modernisation would help the country in bringing the power-producing units to energy-efficiency levels comparable to similar units in OECD countries, it added.

In addition to helping reduce carbon emissions from these units, the project will also support efforts to control particulate emission, and improve water treatment and ash disposal at the plants, leading to better environment conditions for people living in the vicinity.

"More than 400 million people do not have electricity in India," said Roberto Zagha, World Bank Country Director for India. "This is the same as switching off power for the combined populations of the US, UK and France.

Making coal more efficient and less polluting is an important step for India even as the government develops longer-term solutions for addressing its climate change concerns," he said.