Japanese Foreign Minister Kawaguchi announces a major package of loan assistance to India   

The Minister of Foreign Affairs of Japan Ms. Yoriko Kawaguchi, during her official visit to India this week, conveyed to the Minister of External Affairs Mr. Yashwant Sinha, the Government of Japan’s offer of a 110.344 billion yen (approximately Rs.4,434 crore) package of soft loans as Official Development Assistance (ODA) during 2002-03.  The announcement of the loan package to finance seven major socio-economic development projects in India was made at the bi-lateral talks held between the two Ministers on 7^th January.  Notably, this is the first loan assistance package to be offered by the Government of Japan after the discontinuation of economic measures in October 2001, introduced following the nuclear tests conducted by India in May 1998, which includes new projects for assistance.  This package thus marks the full resumption of Japanese ODA programme for India. 

            The seven projects included in the loan package cover power and urban transport, environment and cultural heritage conservation and tourism development sectors.  The package demonstrates in concrete terms Japan’s positive response to India’s development needs, and is in line with the mutually agreed strategy for Japan’s ODA to India, identifying development of infrastructure, reduction of poverty through agriculture and rural development, improvement of quality of environment through afforestation and improvement of quality of water, as the priority areas for assistance.  The loans to be made available through the Japan Bank for International cooperation (JBIC), will be offered at the very low rate of interest of 1.8 percent with repayment period of 30 years including the grace period of 10 years in the case of general projects, and a further concessional rate of 0.75 percent with repayment period of 40 years including the grace period of 10 years, applicable to environment related projects. 

            Brief descriptions of the projects are as follows:

This ongoing project would receive ¥ 5,684 million as the 4^th tranche of time-sliced loan assistance for the construction of 1,000 MW capacity (500 MW X 2) coal-based thermal power station located in the outskirts of Vishakhapatnam District in Andhra Pradesh to meet the serious shortage of power in the State.  The project is being executed by National Thermal Power Corporation.

            This new project, which would receive ¥ 36,771 million loan assistance, involves the construction of 420 MW capacity (210 MW X 2) coal-based thermal power station located in Birbhum District in West Bengal State to augment the power supply to offset the serious power shortage in the State.  The project is to be executed by West Bengal Power Development Corporation Ltd. (WBPDCL).

            This ongoing mega urban transport project in the capital city of India popularly known as Delhi Metro would receive ¥ 33,117 million as the 4^th tranche of time-sliced loan assistance.  Work has feverishly been going on in this prestigious project to create a state-of-the-art high-speed, environment-friendly and safe transport system in Delhi, whose 8.3 km-long Shahdara-Tis Hazari elevated section was inaugurated by Prime Minister Vajpayee on 24^th December 2002.  Conceived as a ‘social Sector ‘ project, Delhi Metro will help siphoning off from the roads a very substantive chunk of daily commuter trips on buses and private vehicles, thereby making a significant impact in terms of reduction in atmospheric pollution, saving in fuel cost per year, and appreciable improvement in the quality of life in the metropolis of Delhi.  The project is being executed by Delhi Metro Rail Corporation Ltd. (DMRC).

            This ongoing project will receive ¥ 5,054 million as the 2^nd tranche of time-sliced loan assistance.  The project in the State of Punjab seeks to promote afforestation activities at the grassroots level to protect natural environment from the serious deterioration caused by depletion of forest cover in the State due to increase in population and rapid urbanization.  The project is being implemented by the Department of Forests and Wildlife, Government of Punjab.

            This new project to be implemented by the Department of Forestry, Government of Rajasthan would receive the loan assistance of ¥ 9,054 million.  The project seeks to improve the living standards of the poor relying on forest and bio-diversity.  The project will promote afforestation activities at grassroots level to restore the depleting forest cover in the State of Rajasthan caused due to the increasing pressure of population and rapid urbanization.