PRESS RELEASEFOECF
Loans to India
TEL:03|3215|1419
FAX:03|3215|1307
February 25, 1997
OECF (The Overseas Economic Cooperation
Fund, Japan: President, Chairman of the Board, Akira Nishigaki)
and India today signed loan agreements totaling \132,746 million
for 11 development projects. The agreements were signed by Mr.
Akira Nishigaki, President, Chairman of the Board and H. E. Mr.
Kuldip Sahdev, Ambassador Extraordinary and Plenipotentiary of
India to Japan. This brings to 132 the cumulative number of loans
committed by OECF to India, making the total for OECF loan commitments
to India approximately \1.5 trillion.
The loan package comprises three
environmental projects (water supply & sewerage and afforestation),
two urban transport projects, five electric power projects, and
one irrigation project. An outline of the loan package is given
below.
1. OUTLINE OF THE PACKAGE
(1) Continued Emphasis
on Environmental Aspects
Environmental protection is essential
for sustainable development. Development that merely gives higher
incomes but causes the quality of life to deteriorate, now or
in the future, is essentially meaningless. In addition to development
of economic infrastructure, the FY 96 loan package to India emphasizes
environmental protection.
Population growth in rural areas has led to the inhabitants' increased need for firewood for fuel and for forest resources for keeping cattle, causing forest coverage to shrink rapidly. Residents' participation in afforestation projects is essential for effective implementation of projects and operation and maintenance of related facilities. Training for state government staff and residents, and feedback from experience to date to give improved project implementation methods are also increasingly required.
Since 1991, OECF has implemented three afforestation projects (Afforestation and Pasture Development Project along the Indira Gandhi Canal Area, Afforestation Project in Aravali Hills, Rajasthan Forestry Development Project) in the State of Rajasthan, the largest dry area in India. In 1995, OECF extended a loan for the Gujarat Afforestation and Development Project. The FY96 package includes two afforestation projects: the Tamil Nadu Afforestation Project and the Eastern Karnataka Afforestation Project.
In selecting the FY96 afforestation projects, OECF did its utmost to ensure that systems enhancing incentives for local residents' participation were incorporated in the projects. They will be encouraged in every way possible to involve themselves in the planning of project implementation, as well as in the maintenance of related facilities, making it possible to reflect their needs in project designing. For example, they will be allowed to utilize forest resources, cutting down trees, after an agreed period of afforestation, to the extent that adequate reproduction of resources is not impaired. NGOs are actively relied on as bridges linking policy makers (state governments) and residents (beneficiaries), and for identifying the needs of the latter.
Afforestation projects also make
for increased employment opportunities for women and the poor,
giving more equitable distribution of the economic gains of development.
In many provincial towns and
cities in India, the wave of urbanization accompanying economic
development has resulted not only in water supply inadequacy,
but also in seriously insufficient access to safe drinking water.
People must obtain water from wells and ponds for drinking,
where there are no proper water supply and sewerage facilities
. Water supply and sewerage projects are directly linked to basic
human needs. The FY96 Kerala Water Supply Project is intended
to enhance residents'
welfare by increasing the supply of safe water in five cities
and towns in Kerala, including the capital of the State.
(2) Building
Economic Infrastructure
Economic activities must be invigorated
and foreign capital must be introduced, if sustained economic
growth is to be attained. OECF loans to India focus on the development
of economic infrastructure with major spill-over effect helping
to create an enabling environment for domestic and foreign businesses
operating in the country.
Chronic shortages of power have been a major bottleneck to economic growth for India. In addition to assisting construction of new power stations to increase generation capacity, OECF also assists projects designed to reduce transmission loss, stabilize power supply, and make it easier to adjust supply-and-demand as between states by the constructing of transmission lines. Renovation and rehabilitation of older power plants is also being implemented.
In the FY96 package, projects
for the construction of new power stations are the Simhadri Thermal
Power Station Project and the Tuirial Hydro-Electric Power Station
Project. Transmission projects are: the Northern India Transmission
System Project and the West Bengal Transmission System Project.
The Umiam Hydro Power Station Renovation Project is a renovation
project. The total loan amount for the power sector projects
is \52.8 billion.
Due to the urbanization resulting from economic growth, traffic congestion in urban areas has increased, causing the fear of rapidly worsening air pollution by exhaust emissions from vehicles. The FY96 projects are aimed at improving traffic flow and conservation of the urban environment in India's two largest cities, Delhi and Calcutta.
The Calcutta Transport Infrastructure Development Project is designed to alleviate traffic jams and to give smoother traffic flow in the center of Calcutta by improving intersections and constructing flyovers.
The Delhi Mass Rapid Transport
System Project, one of the priority projects in the 8th Five Year
plan, aims to build a mass transit system to cope with traffic
congestion and air pollution caused by the increased use of buses
and private cars in recent years by constructing subways and surface
and elevated railways.
Although India became self-sustaining in food grains in the '70s, its agricultural productivity is still lower than that of other Asian countries. In order to feed a growing population in the future and raise the nutrition levels of the country's people, it is necessary to enhance agricultural productivity. Since agriculture is a primary source of income for the poor in rural areas, irrigation projects are expected to play an important role in reducing poverty.
The Rajghat Canal Irrigation
Project is intended to effectively utilize rainfall in the monsoon
season and to increase and stabilize agricultural output by providing
irrigation facilities in Madhya Pradesh. 25% of the expected beneficiaries
are from scheduled castes and tribes.
The fiscal 1996 package amounting to \132,746 million (up 3.1% from the previous year) is the OECF's largest commitment to India. Environment-related projects account for 31% of the 1996 package, electric power for 40%, urban transport infrastructure for 19%, and irrigation for 10%.
Economic liberalization policies
initiated by the Rao Administration on its inauguration in 1991
are being continued under the Gowda Administration, which took
office in June, 1996. India, with its vast domestic market, is
becoming increasingly attractive to international investors. It
is, however, increasingly necessary not only to establish an appropriate
legal framework for businesses, both domestic and from abroad,
but also to create a favorable climate for investment in infrastructure
development. In view of the growing need for economic infrastructure
to fully actualize India's
growth potential, continued assistance in the form of official
loans, such as Yen Loans is essential both today and in the future.
Sectoral Distribution of Commitments to India (Million Yen)
| Sector FY | |||||
| Electric Power
and Gas | |||||
| Transportation | |||||
| Water Supply and
Sewerage | |||||
| Environmental Protection | |||||
| Afforestation | |||||
| Mining and
Manufacturing | |||||
| Agriculture | |||||
| Financial-Intermediary Loans | |||||
| Commodity Loans | |||||
| Others | |||||
| Total |
| Environmental Project
Amount % |
|
|
|
|
|
( ): Number of Projects
2. Amount and Conditions of the Loan
|
| |||
| Northern India
Transmission System Project | 2.3 | General-
Untied | ||
| West Bengal Transmission System Project | 2.3 | General-
Untied | ||
| Umiam Hydro Power
Station Renovation Project | 2.3 | General-
Untied | ||
| Tuirial Hydro-Electric
Power Station Project | 2.3 | General-
Untied | ||
| Simhadri Thermal Power
Station Project | 2.3 | General-
Untied | ||
| Delhi Mass Rapid
Transport System Project | 2.3 | General-
Untied | ||
| Calcutta Transport
Infrastructure Development Project | 10,679 | 2.3 | General-
Untied | |
| Kerala Water Supply
Project | 2.1* | General-
Untied | ||
| Eastern Karnataka
Afforestation Project | 2.1* | General-
Untied | ||
| Tamil Nadu Afforestation
Project | 2.1* | General-
Untied | ||
| Rajghat Canal Irrigation
Project | 2.3 | General-
Untied | ||
| Total |
*Preferential Interest Rate on Environmental
Projects.
3DProject
Description
In the northern part of India, where this project is located, power supply can satisfy only about 84% of peak demand ( supply:14,290 MW, demand:16,950MW) and 93% of energy demand (supply: 97,068GWh, demand: 104,749GWh in Fiscal Year 1994). The demand for power is projected to increase rapidly in the years ahead. In order to deal with this power shortfall, the Dhauliganga Hydroelectric Power Plant and the Chamera Power Plant are under construction. Expansion of the transmission system and new expansion and construction of source of energy are also urgently needed.
The purpose of this project is to increase power supply and enhance the reliability of power supply by i) Construction of a transmission line between Dhauliganga Hydroelectric Power Plant and Bareilly Substation, and expansion of Bareilly Substation in the northern part of the State of Uttar Pradesh, ii) Construction of a transmission line between Jalandhar Substation (in the State of Punjab) and Hamirpur Substation (in the State of Himachal Pradesh), and expansion of both the Jalandhar and Hamirpur Substations.
The cost of construction of the Dhauliganga Hydroelectric Power Plant is covered by a previous OECF loan (signed in Fiscal Year 1995; loan amount: 5,665 million yen). The transmission line between Dhauliganga and Bareilly is to supply power from this power station.
The loan is for construction, equipment, and civil work.
The executing agency is Power
Grid Corporation of India Limited.(Address: Hemkunt Chambers,
89, Nehru Place, New Delhi-110 019, India, TEL:91-11-6434049,
FAX:91-11-6428065)
Projections indicate that electric power demand in the State of West Bengal, in which Calcutta (one of India's 4 biggest cities) is located, will grow rapidly in the period 1996 - 2000. (Annual average growth: 6.9% for peak demand, 7.1% for energy demand). In order to solve the problem of a serious power shortage, development of additional source of energy is in progress.
But transmission system construction is delayed in this state, and, in addition, transmission loss is as high as 20.02%. So, it is essential to reduce transmission loss and stabilize voltage by constructing substations, transmission lines and expanding existing substations and transmission lines in order to enhance the reliability of the power system.
The purpose of this project is to improve the above energy situation by i) construction and improvement of transmission lines (total length: 970km), ii) construction and expansion of related substations (32 sites). In addition, this project has the objective of enhancing the reliability of the power supply by strengthening the linkage with other states by means of development of the transmission system.
The loan is for construction, equipment, civil works and related consulting services.
The executing agency is West
Bengal State Electricity Board.(Address: Vidyut Bhavan, Block
DJ, Sector II, Bidhannagar, Calcutta- 700 091, India, 91-033-3591915,
FAX:91-033-3591954)
Existing power supply capacity in the north-east of India, in which this project is located, can satisfy only about 74% of peak demand (supply :620MW, demand :840MW), and 90% of normal demand (supply : 3491GWh, demand : 3862GWh). The region suffers from a chronic power shortage.
It is estimated that this power shortfall will continue in the future, and construction of power stations is urgently needed.
The purpose of this project is to improve the energy situation in the north-eastern part of India by renovation of the Umiam Power Station (Stage I), which was built 30 years ago. As part of this renovation, turbines and generators will be replaced.
The loan is for equipment and related consulting services.
The executing agency is Meghalaya
State Electricity Boad.(Address: Lum Jingshai, Short Round Road,
Shillong -793003, India, TEL:91-364-226367, FAX:91-364-226445)
Existing power supply capacity in Mizoram State is 25.1MW (21.7MW from 22 diesel generators, 3.4MW from 9 Small Hydro-Electric Power Stations), and there@is a serious shortage of power (shortfalls of 42% for peak demand:69MW, 26% for normal demand) . Power demand in this state cannot be fully satisfied even with the purchase of energy from other states in the north-eastern part of India.
The purpose of this project is to improve the energy situation in this state by constructing an earth-fill dam and a hydroelectric power plant with a capacity of 60MW(2X30MW) on the Tuirial River, near the village of Saipun in the Kolasib sub-division of Aizawl District, Mizoram.
The loan is for equipment, civil works, and related consulting services.
The Executing Agency is North
Eastern Electric Power Corporation Ltd.(Address: Brookland Compound,
Lower New Colony, Shillong - 793003, India, TEL:91-364-224487,
FAX:91-364-226417)
Power demand for agriculture in Andhra Pradesh State (one of the largest agricultural states in the southern part of India) has been expanding rapidly in recent years, resulting in a shortage of energy for industry, which may prove to be a bottleneck for industrial development in this state. Generation capacity at peak times is 4301MW, and there is a shortfall of 1646MW (-27.7%) for a peak demand of 5947MW. It is, therefore, essential to develop sources of energy in order to deal with the serious power shortage.
The purpose of this project is to construct 1000MW coal-fired thermal power station near Devada Village, Vishakhapatnam District, adjacent to the main Industrial Development Zone. This coal-fired thermal power station will use the abundant domestic coal produced in neighbouring Orissa State and help to assure a stable power supply in the State of Andhra Pradesh.
The loan is for construction, equipment and civil works.
Executing Agency is National
Thermal Power Corporation Ltd.(Address: NTPC Bhawan, Scope Complex
7, Institutional Area, Rodhi Road, New Delhi- 110 003, India.,TEL:91-11-4360100,
FAX:91-11-4361018)
Delhi, the capital of India, benefits from the extensive nationwide road and national railway networks, constructed at the beginning of this century in accordance with a well-conceived plan intended to provide long-distance transportation for both passengers and freight. On the other hand, the transportation system inside the city, such as the commuter trains connecting the suburbs and the center, is inadequately developed. As a result, transportation in Delhi depends mainly on the bus network, with buses always overcrowded because the number of buses is inadequate and there are frequent delays. The inadequacy of the mass transportation system causes many serious problems, such as heavy traffic jams and air pollution due to the rapid increase in the number of cars and other vehicles. Given the projections for the increase in the number of cars, construction of a mass transportation is required both for preservation of the environment and in order to alleviate traffic jams.
The purpose of this project is i) to alleviate traffic jams and air pollution, and ii) to establish an efficient and punctual mass rapid transport system, by constructing a subway (Delhi University - ISBT(Inter State Bus Terminus) - Connaught place - Central Secretariat) (11.0km), and a surface and elevated rail corridor (44.3km).
The loan is for the first phase of the whole project.
The loan is for construction, materials and equipment, and the related consulting services.
The executing agency is Delhi
Metro Rail Corporation Limited.(Address: c/o Ministry of Urban
Affairs & Employment, Government of India, TEL:91-11-3011787,
FAX:91-11-3014459 )
India's road and rail networks are unusually extensive and well-developed for a developing country. The total length of nation's roads was 2,041 thousand km (as of March 1992), 49.1% of this was paved, and road density was 0.62km per km2 (as of March 1991). While the number of cars registered increased by 415% between 1980 and 1990, total road length increased by only 37%. Construction and improvement of roads is not keeping pace with the increase in traffic volume.
Calcutta, with a population of more than 12 million, is one of India's biggest cities. The city suffers from serious traffic jams due to the rapid increases in population and the number of private cars, and from environmental problems such as automobile exhaust pollution. The extremely low ratio of roads to total area, traffic lights' not working, excessive concentration of traffic in a few main corridors and large numbers of pedestrians are other reasons for the serious traffic jams.
The purpose of this project is to alleviate traffic jams in the center of Calcutta, to ensure smooth traffic flow, and to develop the economy and urban environment by improvement of intersections (3) and the construction of flyovers (6).
The loan is for intersections improvement, equipment, civil works, and related consulting services.
The executing agency is Transport
Department, Government of West Bengal .(Address: 18 Rabindra Sarani,
Calcutta 700 001, India, TEL:91-033-225-4798, FAX:91-033-245-1483)
The State of Kerala, in the south-western part of India, with a land area of 38,863km2 and a population 29.1 million, has the highest population density (749 people per 1 km2) of any Indian state. Its annual income, Rs. 5,065, is much lower than the national average of Rs. 6,234. The diffusion of water supply in Kerala is delayed and water supply system coverage is as low as 54% (74% in urban areas and 46% in rural areas), compared with the national average water supply coverage of 80%. There are many people who cannot access safe drinking water, and water supply level is not adequate even in the areas served. Especially, the average daily water supply in Trivandrum (state capital) is only 90 liters per person, the second-lowest, after Chennai (Madras), which is 70 liters, of all state capitals, and much lower than the appropriate volume for a city of its size (150-200 liters).
The purpose of this project is to increase the supply of safe drinking water and to improve the quality of people's lives in the following five areas: Trivandrum, Calicut, Pattuvum, Cherthala, and Meenad, by construction, expansion, and renovation of water supply facilities.
The loan is for equipment and materials for intakes, raw water mains, treatment plants, clear water transmission mains, and distribution systems, civil works, and related consulting services.
The executing agency is Kerala
Water Authority.(Address: Jalabhavan, Trivandrum- 695 033, India,
TEL:91-471-62797, FAX:91-471-64903)
India used to be covered by abundant forests. At the beginning of this century, total forest cover in India was 40%. But because of population growth, diversion of forest land to other uses such as cultivation, cutting and felling for fuel wood, wood pulp, and pasturage, caused severe degradation of the country's forests, with forest cover dropping to 22% by 1950. In order to solve this problem, the Government of India established the National Forest Policy, which has the target of covering one-third of total land area with forest.
In the State of Karnataka, located in the south-eastern part of India, total forest area is 3.83 million ha, and forest cover 20%. This forest cover is slightly lower than the average cover for India (23%).
The state suffers from shrinking of its forests because of indiscriminate cutting and felling for use as fuel and fodder. Especially, in the eastern parts of the state, deforestation is so serious that forest cover has fallen to 9%.
Degradation of forests causes reduced water conservation, erosion, decrease of cultivable land, flooding, desertification, ecological destruction, shrinking of habitable area, increased CO2, and global warming. Prevention of deforestation and increase of forest area in India are therefore, pressing needs from the global environment point of view, also.
The purpose of this project is to improve the ecological situation by afforestation with the participation of local people and development of wildlife conservation areas.
The loan is for afforestation activities.
The executing agency is Forests
Department, State Government of Karnataka.(Address: MS Building,
Dr Ambedkar Veedi, Bangalore, India, TEL:91-80-3341484, FAX:91-80-3362935)
The State of Tamil Nadu, in the south-eastern part of India, suffers from shrinking of its forests as a result of indiscriminate deforestation because of the need for wood in urban areas, increased need for fuel and fodder due to population increase in rural areas. While overall forest cover in India is about 23%, forest cover in this state is as low as 14%, although the state government is promoting afforestation activity, with a target of covering one-third of the state's total land area.
The purpose of this project is to improve the ecological situation by afforestation, such as afforestation in villages near reserved forests, afforestation by scheduled castes, afforestation on public lands and afforestation to increase water conservation with the participation of local people.
The loan is for afforestation activities.
The executing agency is Environment
and Forests Department, the State Government of Tamil Nadu.(Address:
259, Anna Salai, Madras - 600 006, India, TEL:91-44-561511, FAX:91-44-450233)
The State of Madhya Pradesh, in the center of India, is an agricultural state where 80% of those in employment are engaged in agriculture. This state is one of the poorest states in India, with an average per capita income ( 4,725 Rupees), much lower than nation's average (6,249 Rupees). Though 80% of total rainfall in the year is concentrated in the monsoon season (June to September), irrigated area is only 19% of total cropping area. Therefore, it is essential to utilize water resources more effectively constructing irrigation facilities.
The purpose of this project is to increase the productivity of agriculture and improve the living standards of farmers in the northern part of the state, where a large percent of the population is poor, by assisting construction of the Rajghat Canal. The Canal will take water from the Rajghat Dam on the Betwa River. Total project irrigated area will be 121,450ha.
The loan is for equipment and materials for canal lining and construction, civil works and related consulting services.
The executing agency is Water
Resources Department, Government of Madhya Pradesh (Address: Mantralaya,
Bhopal - 462 004, India, TEL:91-755-551153, FAX:91-755-551521)