Exchange of Notes concerning Yen Loans of 7 Projects to India
2022/3/19
1. On March 19, Mr. SUZUKI Satoshi, Ambassador of Japan to India, and Mr. Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, exchanged notes in New Delhi, concerning the provision of yen loans related to seven projects (total loan provision of up to 312.258 billion yen).
2. Overview of the Yen Loan Projects
(1) Assam Health System Strengthening Project (loan provision of up to 45.605 billion yen)
This project is to provide a loan to the Government of India for comprehensively promoting the development of public medical institutions, mainly secondary and tertiary medical facilities that will serve as core medical centers, capacity development of medical professionals and improvement in management of medical services in the state of Assam. For instance, it is estimated that the number of annual outpatients in secondary and tertiary medical facilities will increase by two hundred thousand in 2029 (two years after the completion). It is expected that this loan would help in achieving universal health coverage in the state by providing improved medical services to local residents, contributing to sustainable and inclusive growth.
(2) Bengaluru Water Supply and Sewerage Project (Phase 3) (II) (loan provision of up to 37.068 billion yen)
This project is to provide a loan to the Government of India for the construction of water supply and sewerage plants in the Bengaluru Metropolitan Area in the state of Karnataka. Karnataka has a concentrated Indian software industry that contributes to a growing economy but at the same time faces issues such as an inadequate water supply and sewerage capacity. It is expected that this loan will provide stable water supply and sewerage services to meet the increasing water demands, contributing to sustainable and inclusive growth through the establishment of sanitary living environment and industrial revitalization in the area.
(3) Dedicated Freight Corridor Project (Phase 2) (III) (loan provision of up to 116.520 billion yen)
This project is to provide a loan to the Government of India for the construction of dedicated freight railway system between the capital city of Delhi, a major production and consumption center, and Mumbai, a port city and the western gateway of India. The target routes are between Dadri and Rewari and between Vadodara and Mumbai, summing up to 550 km. It is expected that this loan will contribute to improved connectivity and increased industrial competitiveness through meeting the growing freight transportation demands. Further, it will enable an appropriate response to climate change through the introduction of an efficient mode of transportation.
(4) North East Road Network Connectivity Improvement Project (Phase 6) (loan provision of up to 23.129 billion yen)
This project is to provide a loan to the Government of India for the construction and improvement of National Highway 208 in the North Eastern Region, crossing the state of Tripura from north to south and leading to the Bangladesh border. It is expected that the average travel time of the target section will be reduced from 245 minutes to 115 minutes, contributing to economic growth in the region through improved connectivity both within and outside the region.
(5) Tamil Nadu Biodiversity Conservation and Greening Project for Climate Change Response (loan provision of up to 10.535 billion yen)
This project is to provide a loan to the Government of India for the conservation of biodiversity, mitigation of human wildlife conflicts, improvement of livelihood of local residents around forest areas, and capacity development of Tami Nadu Forest Department. It is expected that this loan will contribute to sustainable and inclusive growth by mitigating and adapting to climate change, improving ecosystem and reducing poverty of local residents.
(6) Uttarakhand Integrated Horticulture Development Project (loan provision of up to 6.401 billion yen)
This project is to provide a loan to the Government of India to support the production of horticultural products, building its supply chain and strengthening the organizational structure of the state government. It is expected that this loan will enhance income of agricultural households by increasing the productivity and value of fruits and vegetables and promoting sales of horticultural products in the state, contributing to sustainable and inclusive growth.
(7) Chennai Metro Project (Phase 2) (II) (loan provision of up to 73.000 billion yen)
This project is to provide a loan to the Government of India for the construction of mass rapid transit system in the Chennai Metropolitan Area in the state of Tamil Nadu. For instance, it is estimated that the number of train services in the target section (Line 3 between Madhavaram Milk Colony Station and Sholinganallur Station and Line 5 between Madhavaram Milk Colony Station and Chennai Mofussil Bus Terminus Station) will increase to 408 per day. It is expected that this loan will meet the increasing transportation demand, alleviate traffic congestion and reduce traffic pollution, contributing to improved connectivity, increased industrial competitiveness and dresponse to climate change.
3. Terms and Conditions of the Loans
(1) For project (1) in 2 above
i. Interest rate: 1.00% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(2) For project (2) in 2 above
i. Interest rate: 1.20% per annum (1.00% per annum for the sewerage and 0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(3) For project (3) in 2 above
i. Interest rate: 0.10% per annum (0.01% per annum for consulting services)
ii. Redemption period: 40 years (including a 10-year grace period)
iii. Procurement terms: STEP（Special Terms for Economic Partnership）
(4) For project (4) in 2 above
i. Interest rate: 1.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(5) For project (5) in 2 above
i. Interest rate: 1.00% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(6) For project (6) in 2 above
i. Interest rate: 1.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(7) For project (7) in 2 above
i. Interest rate: 0.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 40 years (including a 12-year grace period)
iii. Procurement terms: Tied between Japan and India
2. Overview of the Yen Loan Projects
(1) Assam Health System Strengthening Project (loan provision of up to 45.605 billion yen)
This project is to provide a loan to the Government of India for comprehensively promoting the development of public medical institutions, mainly secondary and tertiary medical facilities that will serve as core medical centers, capacity development of medical professionals and improvement in management of medical services in the state of Assam. For instance, it is estimated that the number of annual outpatients in secondary and tertiary medical facilities will increase by two hundred thousand in 2029 (two years after the completion). It is expected that this loan would help in achieving universal health coverage in the state by providing improved medical services to local residents, contributing to sustainable and inclusive growth.
(2) Bengaluru Water Supply and Sewerage Project (Phase 3) (II) (loan provision of up to 37.068 billion yen)
This project is to provide a loan to the Government of India for the construction of water supply and sewerage plants in the Bengaluru Metropolitan Area in the state of Karnataka. Karnataka has a concentrated Indian software industry that contributes to a growing economy but at the same time faces issues such as an inadequate water supply and sewerage capacity. It is expected that this loan will provide stable water supply and sewerage services to meet the increasing water demands, contributing to sustainable and inclusive growth through the establishment of sanitary living environment and industrial revitalization in the area.
(3) Dedicated Freight Corridor Project (Phase 2) (III) (loan provision of up to 116.520 billion yen)
This project is to provide a loan to the Government of India for the construction of dedicated freight railway system between the capital city of Delhi, a major production and consumption center, and Mumbai, a port city and the western gateway of India. The target routes are between Dadri and Rewari and between Vadodara and Mumbai, summing up to 550 km. It is expected that this loan will contribute to improved connectivity and increased industrial competitiveness through meeting the growing freight transportation demands. Further, it will enable an appropriate response to climate change through the introduction of an efficient mode of transportation.
(4) North East Road Network Connectivity Improvement Project (Phase 6) (loan provision of up to 23.129 billion yen)
This project is to provide a loan to the Government of India for the construction and improvement of National Highway 208 in the North Eastern Region, crossing the state of Tripura from north to south and leading to the Bangladesh border. It is expected that the average travel time of the target section will be reduced from 245 minutes to 115 minutes, contributing to economic growth in the region through improved connectivity both within and outside the region.
(5) Tamil Nadu Biodiversity Conservation and Greening Project for Climate Change Response (loan provision of up to 10.535 billion yen)
This project is to provide a loan to the Government of India for the conservation of biodiversity, mitigation of human wildlife conflicts, improvement of livelihood of local residents around forest areas, and capacity development of Tami Nadu Forest Department. It is expected that this loan will contribute to sustainable and inclusive growth by mitigating and adapting to climate change, improving ecosystem and reducing poverty of local residents.
(6) Uttarakhand Integrated Horticulture Development Project (loan provision of up to 6.401 billion yen)
This project is to provide a loan to the Government of India to support the production of horticultural products, building its supply chain and strengthening the organizational structure of the state government. It is expected that this loan will enhance income of agricultural households by increasing the productivity and value of fruits and vegetables and promoting sales of horticultural products in the state, contributing to sustainable and inclusive growth.
(7) Chennai Metro Project (Phase 2) (II) (loan provision of up to 73.000 billion yen)
This project is to provide a loan to the Government of India for the construction of mass rapid transit system in the Chennai Metropolitan Area in the state of Tamil Nadu. For instance, it is estimated that the number of train services in the target section (Line 3 between Madhavaram Milk Colony Station and Sholinganallur Station and Line 5 between Madhavaram Milk Colony Station and Chennai Mofussil Bus Terminus Station) will increase to 408 per day. It is expected that this loan will meet the increasing transportation demand, alleviate traffic congestion and reduce traffic pollution, contributing to improved connectivity, increased industrial competitiveness and dresponse to climate change.
3. Terms and Conditions of the Loans
(1) For project (1) in 2 above
i. Interest rate: 1.00% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(2) For project (2) in 2 above
i. Interest rate: 1.20% per annum (1.00% per annum for the sewerage and 0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(3) For project (3) in 2 above
i. Interest rate: 0.10% per annum (0.01% per annum for consulting services)
ii. Redemption period: 40 years (including a 10-year grace period)
iii. Procurement terms: STEP（Special Terms for Economic Partnership）
(4) For project (4) in 2 above
i. Interest rate: 1.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(5) For project (5) in 2 above
i. Interest rate: 1.00% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(6) For project (6) in 2 above
i. Interest rate: 1.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 30 years (including a 10-year grace period)
iii. Procurement terms: General untied
(7) For project (7) in 2 above
i. Interest rate: 0.20% per annum (0.01% per annum for consulting services)
ii. Redemption period: 40 years (including a 12-year grace period)
iii. Procurement terms: Tied between Japan and India