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

January 9, 2003

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 7th 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.

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.
Brief description of the projects are as follows:

Simhadri Thermal Power Station Project (IV)

This ongoing project would receive 5,684 million yen as the 4th 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.

Bakreswar Thermal Power Station Units Extension Project

This new project, which would receive 36,771 million yen 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)

Delhi Mass Rapid Transport System Project (IV)

This ongoing mega urban transport project in the capital city of India popularly known as Delhi Metro would receive 33,117 million yen as the 4th 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 the Prime Minister Vajpayee on 24th 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 make a significant impact in terms of reduction in atospheric 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).

Punjab Afforestation Project (II)

This ongoing project will receive 5,054 million yen as the 2nd 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.

Rajasthan Forestry and Biodiversity Project

This new project to be implemented by the Department of Forestry, Government of Rajasthan would receive the loan assistance of 9,054 million yen. 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.

Yamuna Action Plan Project (II)

The Second Phase of Yamuna Action Plan will receive a loan assistance of 13,333 million yen. The project covering the States of Haryana, Delhi and Uttar Pradesh is to be implemented by the Ministry of Environment and Forests, Government of India. It involves construction of sewage treatment facilities to prevent untreated water from entering into the River Yamuna, and thereby help improving the quality of water in the river.

Ajanta-Ellora Conservation and Tourism Development Project (II)

The Second Phase of Ajanta-Ellora Conservation and Tourism Development Project will receive a loan assistance of 7,331 million yen. This comprehensive project besides involving conservation and protection of the world famous rock-cut shrines of Ajanta and Ellora, also includes improvement of airport facilities, establishment and improvement of tourism-related infrastructure facilities. Through the optimally exploiting the potentials of these World Heritage monuments the project aims not only to achieve greatly enhanced tourism in the region but also thereby help promote regional development. The project will be implemented by the Ministry of Tourism, Government of India.

JAPAN'S ODA LOANS TO INDIA FOR 2002-03
LIST OF PROJECTS