Announcement of World Bank Supporting Coal Project in India on March 22, 1984

FOR IMMEDIATE RELEASE < WorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.SA* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 84/53 Contact: P.B. Sison March 22, 1984 (202) 477-3573 WORLD BANK SUPPORTS COAL PROJECT IN INDIA India will use a $151 million loan from The World Bank to develop large thermal coal deposits in central India. Production from this coalfield will meet the major part of the needs of three thermal power stations in western India. The Singrauli coalfield is about 500 kilometers (km) west of Calcutta, on the border of Madhya Pradesh and Uttar Pradesh. Three coal seams, with mineable reserves estimated at 345 million tons, have been identified for open pit mining. The Bank loan supports the first stage of a development which aims at establishing a level of production of about 5 million tons annually. The project will also support a series of studies designed to improve the operating performance and further development of the coal sector. Training will be provided annually for 304 staff members of the Central Coalfields Limited (CCL), the implementing agency for the project. CCL is a subsidiary of Coal India Ltd. (CIL), a holding company which accounts for nearly 90 percent of India's coal production. Maintenance, warehouse, and service facilities will be constructed south of the mine and near to the existing railway. A project township (1,638 houses and service facilities) will be constructed on a new 200-acre residential site. The project will create 2,340 new jobs when it achieves full production in its ninth year. Power shortages are acute in India. By supplying coal to three large power stations in western India, the project will help reduce these shortages and the associated losses in industrial and agricultural production. The Government of India is providing $177.5 million towards the cost of the project, and CIL, $44.8 million from its own resources. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate linked to the cost of Bank 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.