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Press Releases from the Embassy
Japan-India
Relations
Press Release No.10 |
JAPAN
SETS A NEW PEAK OF SOFT LOAN PACKAGE TO INDIA FOR
THE 2nd CONSECUTIVE YEAR
- Rs.5910 crore loan package to India -
With 15.6% increase over last year India again
the top recipient
New Delhi: 31 March 2006 |
1. |
The
Government of Japan today agreed to extend a massive
package of Official Development Assistance to India,
in the form of soft loans totaling 155,458million
yen (approximately Rs. 5910 crore). The Exchange
of Notes to formalize the agreement to this effect
was concluded this moring at a ceremony held in the
Ministry of Finance in New Delhi. The Notes were signed
and exchanged between H.E. Mr. Yasukuni Enoki, Ambassador
of Japan to India and Mr. Ashok Chawla, Additional
Secretary, Ministry of Finance, Government of India
on behalf of their respective Governments. |
Largest-ever
soft loan package to India |
2. |
For
the last three consecutive years since Financial Year
2003, India has been the top recipient of Japanese
soft loan assistance. With the Yen loan commitment
to India going up this year by 15.6 per cent over the
previous year’s commitment, the Japanese assistance
has attained new peak again. Even though,
owing to difficult fiscal condition Japan’s overall
loan budget has declined by about 50% over the last
ten-year period, the assistance to India, by contrast, increased
its share from 12% of Japan’s total ODA loan budget
in FY1993 to approximately 28%in FY2005. This reflects
the growing Japan-India development partnership and
the importance Japan attaches to India. |
The
loan package |
3. |
The
loan package covers 10 large-scale projects in
the areas of power, urban transportation, urban
water supply and environment related projects. These
concessional loans will be made available through
the Japan Bank for International Cooperation (JBIC),
generally at the rate of interest of 1.3% per annum
with the repayment period 30 years, including the
grace period of 10 years. Among the projects, Delhi
Metro Rail Project (Phase 2) and Bangalore Metro
Rail Project deserve special mention. (See Enclosure
2 for outline of all the 10 projects.
Delhi
Metro project has earned the reputation
of being a model project and a symbolic example
of Japanese cooperation to India. Phase 2 of
Delhi Metro project estimated to cost over Rs.7500
crore will continue to receive financial assistance
from Japan. With the improvement of transport
infrastructure of metropolitan that is essential
for Foreign Direct Investment(FDI) and which
in turn will give a fillip to the economic growth.
Following the successful Delhi Metro project, the Bangalore
Metro project will be built with a total cost of over
Rs.5300 crore. The Bangalore Metro project will also receive the
financial assistance from Japan. These two projects are
expected to emerge as major symbols of cooperation between Japan
and India in the urban transportation sector. |
Strategic
assistance for sustained economic growth and
poverty alleviation |
4. |
The
main objective of Japanese loan assistance is to
support India in establishing physical infrastructure
to boost and sustain economic growth. At the same
time Japanese assistance seeks to support India’s
efforts to alleviate poverty. In keeping with these
goals the loan package strategically covers power,
urban transportation, drinking water supply, irrigation,
and afforestation projects.
Enclosure: |
1.
List of Projects |
|
2.
Outline of Projects |
|
|
Enclosure
– 1 |
JAPAN’S
ODA LOANS TO INDIA FOR 2005-06 LIST OF PROJECTS |
|
PROJECT |
AMOUNT
(in million yen) |
1. |
Purulia
Pumped Storage Project (III) |
17,963 |
2. |
Bangalore
Water Supply and Sewerage Project (II-2) |
28,358 |
3. |
Rural
Electrification Project |
20,629 |
4. |
Delhi
Mass Rapid Transport System Project (Phase 2)
(I) |
14,900 |
5. |
Visakhapatnam
Port Expansion Project
(Engineering Services) |
161 |
6. |
Swan
River Integrated Watershed Management Project |
3,493 |
7. |
Orissa
Forestry Sector Development Project |
13,937 |
8. |
Hussain
Sagar Lake and Catchment Area Improvement Project |
7,729 |
9. |
Kolkata
Solid Waste Management Improvement Project |
3,584 |
|
Total |
155,458 |
Enclosure
– 2 |
Brief
Outline of Yen-Loan Projects for FY 2005 |
1.
Purulia Pumped Storage Project (III)
This
ongoing project for building a pumped storage
power plant with a capacity of 900 MW, which
is the largest in India, will receive the
third and final soft loan assistance of Rs.683
crores. This project aim is to not only meet
the growing peak power demand in West Bengal,
but it will also make effective use of surplus
power supplied by adopting pumped storage
power generation. |
2.
Bangalore Water Supply and Sewerage Project
(II-2)
This
project intends to support activation of
the industry and improve living conditions
in the rapidly growing Bangalore metropolitan
area, by developing water supply and sewerage
facilities, putting in place measures for
comprehensive improvement of water business
management, and developing water supply and
sewerage system in the slums. The project
gets the loan assistance of Rs.1078 crores. |
3.
Rural Electrification Project
With
this project, power substations will be built
and expanded and power distribution will
be developed in Andhra Pradesh, Madhya Pradesh
and Maharashtra. The project will improve
living conditions and boost economic and
social activities by supplying electricity
to about 15 million people in the targeted
states. The project gets the loan assistance
of Rs.784 crores. |
4.
Delhi Mass Rapid Transport System Project
(Phase 2) (I)
This loan is for the second phase of the Project comprising
of 5lines (3 of which are extension of existing lines)
extending a total of 53 kilometers. Once entire length
of second phase is fully operational, 2.59 million commuters
are expected to use Metro per day thereby improving the
urban environment through the reduction of traffic congestion
and vehicle emissions in the capital territory of Delhi.
This project gets the loan assistance of Rs.566 crores.
|
5.
Bangalore Metro Rail Project
The
urban transport system in Bangalore could
not keep pace with the rapid economic development
and growing population of Bangalore and therefore
has given rise to chronic traffic congestion
and causing serious air pollution. This project
aims to overcome these problems and promote
economic activities by replicating the successful
Delhi Metro model. When the entire length
of 33 kilometres is operational, the system
is expected to carry 1.07 million passengers
a day, nearly the same volume as the subway
system in Nagoya, Japan at present. The project
gets the loan assistance of Rs.1699 crores. |
6.
Vishakhapatnam Port Expansion Project (Engineering
Services)
The
project aims to upgrade transport capacity
and improve effectiveness of Visakhapatnam
Port by consolidating the iron ore stockpiling
site, dredging waterway and berth, and strengthening
mooring facilities, thereby contributing
to the country’s greater iron ore exports
and economic growth. The project gets this
time the loan assistance of Rs.6 crores for
the initial preparation (Engineering Services). |
7.
Swan River Integrated Watershed Management
Project
Soil
erosion and floods cause serious damage on
agricultural land especially in the low mountain
area, where there is not much space for arable
land. In order to prevent soil erosion and
raise the living standards local people,
the project will undertake afforestation,
construction of flood control facilities,
soil protection and agriculture development
in the catchment area of Swan River in Una
district of Himachal Pradesh. The project
gets the loan assistance of Rs.133 crores. |
8.
Orissa Forestry Sector Development Project
Increasing
population and growing demand of timber have
cause degradation of forests, soil and water
conservation and thereby affected the living
conditions of impoverished and tribes who
rely on forests for living. This projects
aims to regenerate forests and also take
measures such as micro finance, livelihood
generation activities to improve the living
standards of inhabitants in and around forests.
The project gets loan assistance of around
530 crores. |
9.
Hussain Sagar Lake and Catchment Area Improvement
Project
With
the sewerage system failing to catch up the
rapid growth of population, untreated wastewater
is flowing into the Hussain Sagar Lake in
Hyderabad causing health hazards such as
diarrhea, hepatitis and other waterborne
diseases. This project aims to improve sanitary
conditions and improve efficient water use
by carrying out sewage treatment facilities
and recycled water supply facilities and
so on. The project will receive the loan
assistance of Rs294crores |
10.
Kolkata Solid Waste Management Improvement
Project
This
is the first introduction of an appropriate
regional waste management system not only
in Kolkata Metropolitan area but across India.
This system takes into account environment
considerations, and promotion of 3R(reduce,
reuse and recycle of solid waste) thereby
improving hygienic conditions of the people
in the region through adequate solid waste
disposal. The project gets the loan assistance
of Rs.136 crores. |
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