31 March, 2014
Japan commits New 250 Billion JPY ODA Projects to India

1. Date and Venue

Date: March 31st, 2014
Venue: Ministry of Finance, Government of India

2. Signers

Japan: Mr. Takeshi Yagi, Ambassador of Japan to India
India: Mr. Rajesh Khullar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India

3.Projects (Total JPY251.966 billion, approximately INR15,188 crore)

Today, government of Japan and government of India signed the ODA loan agreement for the following five projects totaling more than INR 15,000 crore. This is the largest amount ever signed at a single signing occasion in the history of Japanese ODA. Three of the projects are in the energy section (New and Renewable energy, Micro, Small and Medium Enterprises Energy Saving, and Haryana Distribution System Upgradation), which is of critical importance to promote economic and social development. The other two (Delhi Metro and Agra Water Supply) aims to directly benefit the grassroots people. The loans for the projects from (1) to (3) were pledged on the occasion of the Summit meeting between Prime Minister of Japan, H.E. Shinzo Abe and Prime Minister of India, H.E. Dr. Manmohan Singh on 25th January, 2014. Today’s agreement reaffirms the two nations’ commitment to bring the strategic global partnership to a higher degree of cooperation.

(1) Delhi Mass Rapid Transport System Project (Phase 3)(II) (JPY148.877 billion, approximately INR 8,933 crore)

The government of Japan has been providing support of total JPY502.717 billion, approximately 30,162INR crore for the development of Delhi Metro. A new INR 8,933 crore loan is granted in order to enhance the transportation capacity of the Delhi Metro, a flagship project of the Japan-India cooperation. This project intends to link the existing 190 km radially developed network with additional 116 km belt line including 6 routes and 6 intervals which connect Indira Gandhi International Airport and Noida district and construction of heritage line connecting Central Secretariat, Delhi Gate, Lal Qila and Kashmir Gate. The completion of the project will extend the length of network to 329.4 km and will transform Delhi Metro into a global standard urban transportation system, comparable to the Tokyo metro.

(2) New and Renewable Energy Development Project (Phase 2)(JPY30 billion, approximately INR 1,800 crore)

A new INR 1,800 crore loan is granted to power producers through Indian Renewable Energy Development Agency Limited (IREDA) for the development of new renewable energy including solar and wind power succeeding the phase 1 project. This ongoing project includes wind power project to the tune of the INR 1,160 crore rupee in Andhra Pradesh, Gujarat, Karnataka and solar power project to the tune of INR 220 crore rupee in Andhra Pradesh. India, ranked 5th among the wind power introducing countries in the world as of end of 2012, shows its willingness to further increase the renewable energy including solar power as illustrated in “Twelfth Five Year Plan (2012-2017)”. This project reaffirms our commitment to sustainable development of India.

(3) Micro, Small and Medium Enterprises Energy Saving Project (Phase 3) (JPY30 billion, approximately INR 1,800 crore)

The Japanese ODA loan up to INR 1,800 crore is granted to 2,000 small and medium-sized enterprises (SMEs) in India through Small Industries Development Bank of India (SIDBI) for Indian SMEs investment in energy conservative equipment. This financing facility enables SMEs in India to utilize energy efficient equipment including Japanese cutting-edge technology on “the Energy Saving Equipment List” at low cost. This loan aims to help improve the efficiency and eliminate energy shortage in India.

(4) Haryana Distribution System Upgradation Project(JPY26.8 billion, approximately INR 1,608 crore)

The government of Japan has been providing support of total JPY1,094.4 billion approximately INR65,664 crore for 73 projects in the power sector of India. This ODA loan for power sector establishes 150 sub-stations and provides a new distribution line of 4,359 km, automatic electroscopic of 63,000 units, and meter equipment to 1,705,000 places in all of the 21 district of Haryana. This project will increase the capacity of the sub-stations in the region by 1,905 MVA and will bring down power distribution loss rate to 30 percent, by which people and companies in the region enjoy dramatically stabilized and improved power supply. This is a win-win collaborative project between Japan and India that aims to help develop infrastructure in Haryana, home to one of the most successful business cities such as Manesar and Gurgaon where 325 Japanese companies operate as of January 2014, and to attract further Japanese investment to Haryana.

(5) Agra Water Supply Project (II) (JPY16.279 billion, approximately INR 977 crore)

Additionally, the Japanese ODA loan is granted to the "Agra Water Supply Improvement Project" started since 2007 in order to correspond to the project cost increase coming from material price hike. This aims to help improve the standard of living of the people through the construction of water conveyance facilities as well as the renovation and expansion of the water supply facilities in Agra city. Furthermore, this ODA loan is expected to benefit many tourists who visit the worldwide tourist destination the Agra city and home to world heritage Taj Mahal.