Announcement of India to Expand Regional Power Network with New Generating Unit on June 24, 1984

FOR IMMEDIATE RELEASE ,,World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.SA. BANK NEWS RELEASE NO. 84/105 Contact: P.B. Sison June 29, 1984 (202) 477-3573 INDIA TO EXPAND REGIONAL POWER NETWORK WITH NEW GENERATING UNIT India is continuing the development of regional power networks with the installation of a 500 megawatt (MW) generating unit in the western region. The World Bank is lending $135.4 million for the project, which will cost more than $361 million. The states of Gujarat, Maharashtra, and Madhya Pradesh make up India's western region. Another power project, to expand the supply of electric power in the eastern region, will also be launched shortly. Last week, The World Bank approved a loan of $300.8 million for that project, which will be carried out at a cost of $1.1 billion. The 500 MW unit to be installed in the western region will provide additional thermal capacity which will help reduce power shortages there. To be located at the Trombay plant, near Bombay, the unit will replace four old generators which are due to be retired towards the end of the 1980s. The new unit will reduce the use of fuel by the equivalent of about 110,000 tons of oil a year. The generating unit will consist of a turbogenerator, steam generator, and electrical and mechanical plant. A transmission line and fuel oil storage tanks are also included. The unit is scheduled to start commercial operation in 1989. It will contribute about 3 percent of the expected total generating capacity in the western region at that time. The project will be implemented by the Tata Electric Companies (TEC), which is is an affiliate of a group of enterprises that has a long history of successful operations in industrial and other fields in India. TEC is investing $81 million towards the cost of the project. Commercial borrowings abroad will cover $55 million of the cost, and financial institutions in India are expected to provide financing of $90 million. The World Bank loan is for 20 years including five years' grace, with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.