Hydel power exploitation in the state sector will get a major boost with the Asian Development Bank sanctioning a loan Rs 3,200 crore to the government for the execution of three major power projects. Negotiations had been going on for the past more than a year and the bank had agreed in principle to fund projects in September last. The final hurdle was crossed early this week when the Centre gave its approval to the loan deal. The most attractive feature of the deal is that the fund-starved hill state will receive 90 per cent of the amount as an outright grant as the loan will be routed through the Centre. In the first phase, the bank will release Rs 1700 crore for the projects involving an expenditure of 4,500 crore. The state is likely to receive the first instalment by October. It will have to pay back only 10 per cent of the amount (Rs 320 crore) over a long period. The Centre will pay 5.5 per cent interest on the loan but it will be given as a grant to the state. The Centre is giving 90 per cent of the loan amount as a grant under the plan drawn out to make the state self-reliant by exploiting its huge potential for hydel generation and tourism. The government has assigned the 240-MW Kashang, 100-MW Sainj , 402-MW Shongtong-Karcham projects and the 111-MW Sawra Kuddu projects to the newly set up Himachal Power Corporation. Paucity of funds has been the main hurdle in execution of the major projects in the state sector. Out of the total 6310 MW of hydel potential harnessed so far, only 468 MW has been exploited in the state sector. The bank will fund only three stages of the Kashang project, which is to be executed in four stages. The fourth stage of 40 MW has not been covered under the loan deal. The government has 60 per cent equity in the corporation, while the state electricity board holds the remaining rest 40 per cent. It has been constituted on the pattern of the Sutlej Jal Vidyut Nigam for implementing big hydroelectric projects of more than 25 MW capacity. The government was forced to set up a new corporation following the bitter experience it had with the board in execution of the 126-MW Larji project. Besides huge time and cost over-runs, there were large-scale financial irregularities leading to the registration of vigilance cases against senior engineers. The ADB is keen to provide funds for developing tourism for which the state has a vast potential. Besides Himachal, five other states, Tamil Nadu, Punjab, Gujarat, Sikkim and Madhya Pradesh have been selected for funding tourism-related projects by the bank. It has agreed in principle to provide financial assistance up to Rs 400 crore to the state for developing the required infrastructure. The state has been asked to come up with concrete proposals for developing various theme-based tourism circuits so that funds could be provided for putting in place the required infrastructure.