The Rural Electrification Corporation (REC) has sanctioned Rs 850 crore for the Tamil Nadu Transmission Corporation (TANTRANSCO) to construct 54 new substations across the state.

The substations, each with a 110 kV capacity, will be located in various cities, including Chennai. With Tamil Nadu's power demand growing at six percent annually, the state's electricity requirement is expected to exceed 27,541 MW by 2030. The loan, sanctioned at an interest rate of 9.25 percent, will support infrastructure expansion to meet this rising demand.

However, TANTRANSCO and other power companies face a combined debt burden of Rs 1.7 lakh crore, prompting concerns over high interest rates, which range from 9.25 percent to 12.65 percent. REC has already provided nearly Rs 80,000 crore to the state for infrastructure upgrades and is considering further interest rate reductions.