Announcement of Bank Lends One Hundred Forty-Five Million US Dollars for Development in India on May 6, 1976

.. world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telep'.1one: (202) 393-6360 BANK NEWS RELEASE NO. 76/46 MAY 6,. 1976 BANK LENDS $145 MILLION FOR DEVELOPMENT IN INDIA The World Bank today announced the approval of a "Third Window" loan of $145 million to assist in financing the development of Irrigation works and command areas of major irrigation systems in India's Andhra Pradesh State. The $297 million composite project will help complete the con- struction of the irrigation and drainage works of the Nagarjunasagar proj- ect, and provide the first stage, covering three years, of development on • 72,000 hectares in the command areas of four irrigation systems in Andhra Pradesh. The project is the first step in a program that will ultimately cover an area of over one million hectares. The project will bring major benefits to Andhra Pradesh and India. At full development, the project will help to increase foodgrain production. Rice production, for instance, will be increased by 327,000 tons to 1.5 mill ion tons a year. Reliable irrigation will be provided to 100,000 farms. nver a mill ion people will get additional employment and wages. Net farm incomes, at present around $144 per hectare per year on unirrigated land, vJill double through the provision of irrigation and quadruple due to command area development and improved extension services. The project is scheduled to be completed in 1982. The "Third Window" loan is for 25 years including 7 years of grace. It will carry • interest at 4i% per annum. An additional 4% will be paid to the Bank by the Interest Subsidy Fund, representing the difference between the Bank's standard interest rate and the charge to India. NOTE: Money figures are expressed in U.S. dollar equivalents. Form No. 1121 (9-75) T E CHNI CAL DAT A PROJECT: Andhra Pradesh Irrigation & Command Area Development Composite r COUNTRY: India TOTAL COST: $297 mill ion BANK FINANCING: $145 mill ion "Third Window" loan for 25 years with interest at~!% per annum. OTHER FINANCING: Governments of India and Andhra Pradesh, Agricultural Refinance and Development Corporation, and participating agricultural development and commercial banks. IMPLEMENTING ORGANIZATION: Irrigation Department and The Command Area Development Department, Government of Andhra Pradesh, Hyderabad, India. PROJECT DESCRIPTION: The project consists of 1. completion of 105-kilometer (km) • Nagarjunasagar left main canal and the construction of irrigation and drafnage facilities for the left bank; 2. completion of the 47 km Nagarjunasagar right main canal and construction of drainage for the right bank; 3. rehabilitation, upgrading or construction of 1,575 km of rural roads; 4. command area development on 72,000 hectares; 5. a program to monitor water use efficiencies; 6. extension service assistance; and 7. assistance in projer,t preparation. PROCUREMENT: Out of $13.8. mill ion worth of vehicles and equipment, $7.7 mill ion would be subject to international competitive bidding (ICB). Civil works for the Nagarjunasagar main canals will be through ICB. CONSULTANTS: Six man-months for water use efficiencies measurement and six man-months for modernization program. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20% to 25% 1982 -0- •