Asian Development Bank (ADB) said it would invest in non-convertible debentures worth ₹1.5 billion (~$18.2 million) issued by Tata Power Delhi Distribution Limited (TPDDL), the distribution unit of Tata Power.

Additionally, the partnership will partially fund a 10 MWh pilot battery energy storage system (BESS) through a $2 million grant.

It would be South Asia’s first grid-scaled energy storage project at the distribution transformer level.

TPDDL will use the debt obtained through the senior secured financing to set up a new 66/11-kilovolt grid and expand transformers, substations, feeder lines, and switching stations.

The financing will also be used to install smart meters and replace outdated electrical equipment and meters. This is aimed at improving the overall efficiency and effectiveness of the power distribution system.

The pilot BESS will assist TPDDL in implementing an additional 50 MWh of BESS capacity by providing evidence of concept and lessons learned.

Goldman Sachs and Bloomberg Philanthropies’ Climate Innovation and Development Fund will provide the ADB-administered grant.

ADB’s Director General for Private Sector Operations, Suzanne Gaboury said, “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 Delhi’s more disaster-resilient power distribution system.”

Tata Power’s CEO and Managing Director Praveer Sinha said that the BESS is critical in constructing a robust grid and laying the groundwork for a future-ready power distribution network.

India’s Ministry of Power has set a goal of achieving a battery storage capacity of 4% of total electricity consumption by 2030, as announced in 2022. India would require a total battery energy storage capacity of 182 GWh to achieve this target by 2030.

In March 2023, Tata Power Renewable Energy (TPREL), a subsidiary of Tata Power, signed a power purchase agreement with TPDDL to supply 510 MW of wind-solar hybrid power.

Earlier in the month, TPREL approved the allotment of 200 million compulsorily convertible preference shares to GreenForest New Energies. The shares have a face value of ₹100 (~$1.2) each at par, amounting to a total of ₹20 billion (~$242.4 million).