India will be getting its own dedicated transmission infrastructure for renewable energy developments thanks to a new debt financing agreement worth $500 million to cover the cost of the project.

The Power Grid Corporation of India (PGCIL) reported in February that it had signed a debt financing contract worth $500 million from the Asian Development Bank. A majority of these funds are anticipated to be directed towards the build of new transmission line infrastructure that will be created to transfer electricity that is being generated from clean energy project across the country.

The new transmission lines will go from Rajasthan in North India, which has the greatest density of solar and wind energy projects, through to Haryana and Punjab. These are areas where land availability and its cost are constraints that limit renewable energy development.

It isn't yet certain if the debt financing agreement is a fresh one or a continuation of earlier signed contracts. Towards the end of 2015, the Asian Development Bank confirmed that it had discussed plans for a financing facility of the same amount delivered as a government-backed loan, with an extra $500 million delivered as a non-sovereign loan.

KfW, the German firm, has also announced that it will be providing one billion euros of funding for the ambitious infrastructure project. The funding will be directed towards the creation of new current terminals in states that include Kerala and Tamil Nadu.

The Power Grid Corporation of India has begun its work on progressing the Green Energy Corridors project. It has already moved the second phase of the project into operation, completed tenders for work in Karnataka and Madhya Pradesh and planned a transmission installation in Andhra Pradesh. All these states had various auctions under their policies for solar power.