Announcement of India Borrows Two Hundred Fifty Million Dollars for Electric Power Development on January 8, 1979

FOR IMMEDIATE RELEASE •world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/40 January 8, 1979 IDA NEWS RELEASE NO. 79/39 INDIA BORROWS $250 MILLION FOR ELECTRIC POWER DEVELOPMENT The World Bank and its affiliate, the International Development Association (IDA), today announced the approval of a loan and credit totaling $250 mi J 1 ion to assist India increase its e 1ectri c power ·generating capacity. The proceeds of an IDA credit of $200 million and a World Bank loan of $50 mill ion will help finance the construction of the first three genera- ting units with a total capacity of 600 megawatts (MW) and the provision of ancillary equipment at the Ramagundam thermal power station in the State of Andhra Pradesh. The project also includes the construction of 1,200 kilometers of 400 kilovolt transmission. The $511 million project, which is scheduled for completion by July 1984, is part of a $1,300 million plan to construct a 2,100 • megawatt power station at Ramagundam together with associated transmission by 1983. While per capita demand for electricity has be~~ r1s1ng in India, it remains among the lowest in the world at about 140 kilowatt-hour per annum. Growth of consumption I.as been particu1ar1y rapid in the· rural areas, where more than 80% of the total population live. The number of electrified villages grew f~om just over 3,000 in 1950 to 211,000, or over one third of all villages in India, by 1977. During the next five years, India plans to electrify a further 110,000 villages and \o increase the number of connections in villages already electrified. The number of irrigation pumpsets and tubewells which have been energized increased from 21,000 in 1950 to 3.3 million by the end of 1978. An additional 3 million s~e expected to be energized by the end of 1982. In the 1950s and 1960s, power generation and the expansion of in- stalled capacity kept pace with consum~tion, growing on average by about 11% annually. Since 1970, the situation h~5 deteriorated and power shortages have grown in frequency cmd duration as demand for power hiJs outstripped supply. To help cope with pcMer scarcity and to strengthen national planning and co- ordination of the power system, the Gove.rnment of India has undertaken to construct and operate large centra11y owned generating stations like Ramagun- dam. Today's loan and credit bring the total of Bank and IDA assistance for electric power development in India to $1,331 mill ion. The World Bank loan to India is repayable in 20 years, including • five years of grace, with interest at 7.35% per annum. The IDA credit is for 50 years, including 10 years of grace. It is interest free except for a 5ervice charge of 3/4 of 1% to meet IDA's administrative costs. NOTE: Money figures are expressed in U.S. dollar equiva~ c-~.its. FORM NO. 1121 (5-76) T EC HN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Ramagundam Thermal Power India $511 mi 11 ion • IDA FINANCING: $200 million, standard IDA terms BANK FINANCING: $50 million loan, repayable over 20 years, including five years' grace, with interest at 7.35% per annum. OTHER FINANCING: Government of India IMPLEMENTING ORGANIZATION: The National HH~tmal Power Corporation Limited 1101 Ashoka Estate, 24 Barakhamba Road New De 1hi 1l 0001 India. PROJECT DESCRIPTION: Construction of a power station comprising three 200 MW generating units, together with ancillary equipment and related facilities, at Ramagundam in the State of Andhra Pradesh, and about 1,200 km of associated transmission. • PROCUREMENT: All equipment financed under the loan and credit will be procured through international competitive bidding. Indian manufacturers competing under international competitive bidding will be granted a pref- erence margin of 15% or the current rate of import duty, whichever is less. FINANCIAL RATE OF RETURN: 10% ESTIMATED COMPLETION DATE 1985 - 0 - •