State-run Power Grid Corporation of India Ltd is likely to get $400 million (over Rs 1,980 crore) funding from the International Finance Corporation for undertaking electricity transmission projects in the country.

The proposed funding would make up for 15 per cent of the national power transmission company’s project cost, estimated to be worth $2.3-3.5 billion, according to IFC.

The entity, a part of World Bank group, focuses on lending to entities in developing countries. IFC would put up the $400-million funding proposal before its board on May 3.

“The total project cost is estimated to be $2.3-3.5 billion over the next 12 months... IFC financing of up to $400 million is expected to finance approximately 15 per cent of the project cost on corporate finance basis,” IFC said in its ‘Summary of Proposed Investment’.

PowerGrid is expected to fund 70 per cent of the project cost through debt while the remaining 30 per cent will be from internal accruals.

“The proceeds from IFC is intended for financing transmission projects to be undertaken by PowerGrid and shall not be used for EPC (Engineering, Procurement and Construction) consulting and/or O&M (Operations & Maintenance) services and/or joint venture projects,” IFC said.

Balance of the debt would be raised from multilateral lenders “namely World Bank and ADB and through issuance of domestic bonds’’.

Apart from this loan, PowerGrid has also asked for IFC’s support to enter other markets.

“PowerGrid is also seeking engagement with IFC to increase its participation in other emerging markets. It would like to take up projects in Asia and Africa to expand its footprint and support from IFC will help the company enter these markets,” the summary noted.

The public sector major already has board approvals for investments worth about Rs 70,000 crore related to 12th Plan Period (2012-17) projects.

It reported a profit after tax of Rs 809 crore in the three months ended December 31, 2011 compared with Rs 591 crore in the year-ago period.