Announcement of India to Borrow Seven Hundred Eighty-Five Million Dollars from the World Bank on May 21, 1984

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* WORLD BANK NEWS RELEASE NO. 84/73 Contact: P.B. Sison IDA NEWS RELEASE NO. 84/74 (202) 477-3573 May 21, 1984 INDIA BORROWS $785 MILLION FROM THE WORLD BANK FOR THREE PROJECTS The World Bank has approved three loans to India totaling $641.7 million for projects to increase fertilizer production, electrify part of the Indian Railways system, and expand the availability of electricity. An IDA Special Fund credit of SDR 134.4 million ($143 million) will also support the hydropower project. Madhya Pradesh Fertilizer Project The first loan of $203.6 million will help finance the construction of a fertilizer plant at Vijaipur in the State of Madhya Pradesh in the western region, with the aim of expanding domestic nitrogenous fertilizer production. The project supports India's efforts to increase agricultural output by expanding the availability of fertilizer while reducing the country's reliance on fertilizer imports. The plant will consist of a gas-based ammonia unit, two urea units, and integrated power and steam generation units. The project is part of the government plan to use the vast quantities of free gas from offshore fields near Bombay. Natural gas development is being assisted by a previous World Bank loan for a gas pipeline project designed to provide an adequate supply of gas for the fertilizer plant. The National Fertilizer Limited (NFL), a government-owned fertilizer company, will be in charge of construction and management of the plant. The company helped to implement and operate India's first three fuel oil-based ammonia and urea complexes. The $638.6 million project will include the provision of infrastructure, as well as auxiliary and offsite facilities. A new township of 1,015 single and multi-residential units will be established for permanent staff and their families. A school, hospital, and shopping center will also be built. The project will set up road and rail connections and a power link from the state grid to the project site. The Bank loan will also provide funds for the preparation of a study for the rehabilitation of India's coal-based fertilizer plants. Japan, Denmark, and Italy will participate in financing the project. Railway Electrification and Workshop Modernization A second World Bank loan, of $280.7 million, will support a program being carried out by the Indian Railways to increase its carrying capacity to meet growing traffic demand and to make better use of existing assets. Note: Money figures are expressed in U.S. dollar equivalents. -2- The improvements are vital to the economic well-being of the country, as the railways are the backbone of the domestic freight and passenger transportation system. The $1.2 billion project will electrify some 3,000 kilometers of major trunk routes between the cities of New Delhi, Bombay, Madras and Calcutta. The company will acquire cars for overhead equipment testing and a number of specialized maintenance vehicles for the newly electrified lines. To ensure full benefit from the electrification program, a detailed review will be carried out of railway operations near Bombay where a bottleneck currently exists. Recommendations will be made for streamlining operations there and for providing appropriate communications facilities. The project will also cover the modernization of six of the company's major workshops, of a railway coach factory near Madras, and of a number of maintenance depots. In all workshops and depots, the emphasis will be on modernizing equipment, updating materials handling procedures, improving quality control and introducing appropriate management information systems and training. The Bodhgat Hydroelectric Project The Bodhgat Hydroelectric Project, to increase electricity production in the State of Madhya Pradesh and in the Western Region of India, will be partially financed by a $157.4 million World Bank loan and an SDR 134.4 million ($143 million) credit from the IDA Special Fund. The remaining funds for the $937.5 million project will be provided by the Government of India, the Madhya Pradesh Electricity Board, and other financing institutions. The project will assist in meeting the growing demand for electricity through the addition of 500 megawatts of hydropower capacity and better use of existing thermal plants within the state. A 500 megawatt hydropower station will be built, including all equipment, civil works, and a transmission line to link the station to the western regional grid. Included in the civil works is the construction of a combined gravity and rock-fill dam, some 4,500 meters of tunnels and shafts, a powerhouse, and five kilometers of discharge channel. A pilot thermal plant rehabilitation program designed to provide more efficient use of the thermal stations of the Madhya Pradesh Electricity Board will be completed. It will serve as a basis for the eventual development of a countrywide rehabilitation program. Improvement and expansion of the Board's data processing unit and services will also be included. The World Bank loans are for 20 years, including five years of grace, with a variable interest rate linked to the cost of the Bank's borrowings. They also carry annual commitment charges of 0.75 percent on undisbursed balances and front-end fees of 0.25 percent on the amount of the loans. The IDA Special Fund credit is for 50 years, including 10 years of grace, it carries no interest but has small annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). The Special Fund is composed of contributions from some member countries of IDA and is additional to IDA's regular resources. FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* WORLD BANK NEWS RELEASE NO. 84/73 Contact: P.B. Sison IDA NEWS RELEASE NO. 84/74 (202) 477-3573 May 21, 1984 INDIA BORROWS $785 MILLION FROM THE WORLD BANK FOR THREE PROJECTS The World Bank has approved three loans to India totaling $641.7 million for projects to increase fertilizer production, electrify part of the Indian Railways system, and expand the availability of electricity. An IDA Special Fund credit of SDR 134.4 million ($143 million) will also support the hydropower project. Madhya Pradesh Fertilizer Project The first loan of $203.6 million will help finance the construction of a fertilizer plant at Vijaipur in the State of Madhya Pradesh in the western region, with the aim of expanding domestic nitrogenous fertilizer production. The project supports India's efforts to increase agricultural output by expanding the availability of fertilizer while reducing the country's reliance on fertilizer imports. The plant will consist of a gas-based ammonia unit, two urea units, and integrated power and steam generation units. The project is part of the government plan to use the vast quantities of free gas from offshore fields near Bombay. Natural gas development is being assisted by a previous World Bank loan for a gas pipeline project designed to provide an adequate supply of gas for the fertilizer plant. The National Fertilizer Limited (NFL), a government-owned fertilizer company, will be in charge of construction and management of the plant. The company helped to implement and operate India's first three fuel oil-based ammonia and urea complexes. The $638.6 million project will include the provision of infrastructure, as well as auxiliary and offsite facilities. A new township of 1,015 single and multi-residential units will be established for permanent staff and their families. A school, hospital, and shopping center will also be built. The project will set up road and rail connections and a power link from the state grid to the project site. The Bank loan will also provide funds for the preparation of a study for the rehabilitation of India's coal-based fertilizer plants. Japan, Denmark, and Italy will participate in financing the project. Railway Electrification and Workshop Modernization A second World Bank loan, of $280.7 million, will support a program being carried out by the Indian Railways to increase its carrying capacity to meet growing traffic demand and to make better use of existing assets. Note: Money figures are expressed in U.S. dollar equivalents. -2- The improvements are vital to the economic well-being of the country, as the railways are the backbone of the domestic freight and passenger transportation system. The $1.2 billion project will electrify some 3,000 kilometers of major trunk routes between the cities of New Delhi, Bombay, Madras and Calcutta. The company will acquire cars for overhead equipment testing and a number of specialized maintenance vehicles for the newly electrified lines. To ensure full benefit from the electrification program, a detailed review will be carried out of railway operations near Bombay where a bottleneck currently exists. Recommendations will be made for streamlining operations there and for providing appropriate communications facilities. The project will also cover the modernization of six of the company's major workshops, of a railway coach factory near Madras, and of a number of maintenance depots. In all workshops and depots, the emphasis will be on modernizing equipment, updating materials handling procedures, improving quality control and introducing appropriate management information systems and training. The Bodhgat Hydroelectric Project The Bodhgat Hydroelectric Project, to increase electricity production in the State of Madhya Pradesh and in the Western Region of India, will be partially financed by a $157.4 million World Bank loan and an SDR 134.4 million ($143 million) credit from the IDA Special Fund. The remaining funds for the $937.5 million project will be provided by the Government of India, the Madhya Pradesh Electricity Board, and other financing institutions. The project will assist in meeting the growing demand for electricity through the addition of 500 megawatts of hydropower capacity and better use of existing thermal plants within the state. A 500 megawatt hydropower station will be built, including all equipment, civil works, and a transmission line to link the station to the western regional grid. Included in the civil works is the construction of a combined gravity and rock-fill dam, some 4,500 meters of tunnels and shafts, a powerhouse, and five kilometers of discharge channel. A pilot thermal plant rehabilitation program designed to provide more efficient use of the thermal stations of the Madhya Pradesh Electricity Board will be completed. It will serve as a basis for the eventual development of a countrywide rehabilitation program. Improvement and expansion of the Board's data processing unit and services will also be included. The World Bank loans are for 20 years, including five years of grace, with a variable interest rate linked to the cost of the Bank's borrowings. They also carry annual commitment charges of 0.75 percent on undisbursed balances and front-end fees of 0.25 percent on the amount of the loans. The IDA Special Fund credit is for 50 years, including 10 years of grace, it carries no interest but has small annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). The Special Fund is composed of contributions from some member countries of IDA and is additional to IDA's regular resources.