Announcement of India Launches Power Project in Uttar Pradesh and Urban Development Scheme in Tamil Nadu on June 17, 1988

FOR IMMEDIATE RELEASE ) ' 'NorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE N0.88/87 Contact: Leandro V. Coronel IDA NEWS RELEASE NO. 88/86 (202) 477-3641 INDIA LAUNCHES POWER PROJECT IN UTTAR PRADESH; URBAN DEVELOPMENT SCHEME IN TAMIL NADU WASHINGTON, June 17, 1988 -- India will use a World Bank loan of $350 million to launch a power project in Uttar Pradesh State and a credit of SDR 216.5 million ($300.2 million) from the International Development Association (IDA) to finance an urban development scheme in Tamil Nadu. IDA is the World Bank's concessionary lending affiliate. The power project is designed to reduce acute power shortages in Uttar Pradesh and the northern region, and benefits from the urban project will include affordable housing for close to 900,000 poor people in Tamil Nadu. Uttar Pradesh Power Project Uttar Pradesh is one of India's largest and most populated states. It has large coal reserves and a substantial hydroelectric potential. But the power transmission and distribution system is inadequate and overloaded, resulting in excessive system losses. The power project will reduce power shortages, make the existing thermal power station and high-voltage transmission system more efficient, and introduce a new technology in power generation with the installation of fluidized bed boilers. It will also promote the development of economic hydro-resources and supplement coal resources used for power generation as well as strengthen the Uttar Pradesh State Electricity Board. A 330-megawatt hydropower station will be constructed, an additional coal handling system will be installed, wagons for coal transport will be purchased, about 430 kilometers of high-voltage transmission lines will be built, and 2,000 energy meters will be installed. Resettlement, rehabilitation and afforestation measures associated with the construction of the hydropower station will be taken. The environmental impact of the project will be limited, and because the hydropower station area is sparesly populated, only 59 families will need to be resettled. The World Bank loan is for 20 years, including five years' grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual conunitment charge of 0.75 percent on the undisbursed balance.  r I - 2 - Tamil Nadu Urban Development Project This project is designed to strengthen the functioning of institutions involved with the programming and provision of urban services and management of urban investments. Its shelter component aims at boosting the availability of serviced land, especially for the poor, and sterning the growth of slums. A third aspect of the project seeks to make the state's urban transport system more efficient. A Municipal Urban Development Fund will be established to finance equipment and civil works, and support the maintenance and delivery of services by municipal agencies. Serviced residential land, basic housing and community facilities will be provided to about 70,000 poor families and slum improvements will benefit another 94,000 households, or a total of about 880,000 people. The transport component will include improvement and construction of roads, bridges, traffic signals and pedestrian facilities and support for bus operations in Madras. This project, in another densely populated and urbanized Indian state, will also have a positive impact on the environment through slum improvement and the provision of housing and related water and sanitation facilities. The IDA credit is for 35 years, including 10 years• grace; it carries no interest, but has annual charges (0.5 percent on the undisbursed balance and 0.75 percent on the disbursed balance). NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.