Announcement of World Bank and IDA Assist Projects in India's Agricultural Sector and Cement Industry on March 24, 1986

FOR IMMEDIATE RELEASE lNTt11NJI.T10N11.t MONf:r. IOIN'r LIB" '.ii.RY E'IIND nll.Ry World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 86/59 Contact: Pastor Sison IDA NEWS RELEASE NO. 86/40 (202) 477-3573 March 24, 1986 WORLD BANK, IDA ASSIST PROJECTS IN INDIA'S AGRICULTURAL SECTOR AND CEMENT INDUSTRY India will use two loans totalling $331 million from the World Bank and a credit of SOR 127.5 million ($140 million) from the International Development Association (IDA) to help finance projects in the agricultural sector and in the cement industry. The agricultural project is aimed at raising farm production and incomes through the expansion of irrigated areas and the efficient use of water supplies at existing irrigation sites. The cement industry project will help increase the production of cement while reducing the consumption of fuel. The Second Andhra Pradesh Irrigation Project The $475.8 million project is a combination of new irrigation works and those currently in progress in Andhra Pradesh, India's fifth largest state. The World Bank is supporting the project with a loan of $131 million, while IDA -- the Bank's concessionary lending arm -- will provide assistance with a credit of SOR 127.5 million ($140 million). Under the project, the command areas of the Sriramasagar (SRS) and Srisailam Right Branch Canal (SRBC) will be expanded and developed through irrigation. The irrigation network in about 165,000 hectares (ha) in SRS will be modernized and completed, and irrigation will be provided to a further 163,000 ha. Funds will be provided to develop about 65,000 ha of the estimated 77,000 ha that comprise the SRBC. The project will help introduce new designs and standards for constructing irrigation works, along with a new irrigation system that will ensure a reliable and equitable supply of water. Better standards for managing and maintaining irrigation sites will also be introduced. Training facilities for field staff and farmers will be provided. . .. / NOTE: Money figures are expressed in U.S. dollar equivalents. 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.  - z- The project is expected to benefit some 101,000 farm families and to create some 47,800 farm jobs and about 12,200 associated jobs. The annual value of crop production is expected to increase by about $127 million. Besides the assistance from the World Bank and IDA, other funding will be provided by the Government of India and the State Government of Andhra Pradesh. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (O.S percent on the undisbursed balances and 0.75 percent on the disbursed balances). Cement Industry Project The second project, which is designed to increase the production of cement while consuming less fuel, will be supported by a World Bank loan of $200 million. The project will support the government's further liberalizing of cement prices and production and the introduction of a technology that is energy-efficient. To achieve this, six cement plants in the private sector and one in the public sector will be converted from the less efficient wet-process technology to a modern dry-process technology. Investments to rehabilitate and modernize other cement plants will be made. Systems of marketing and distribution will be improved. Training and technical assistance will be provided, and training programs will be developed. Existing industry-owned training facilities will he upgraded. The total cost of the project is $469.8 million. Additional funding will be provided by the Industrial Credit and Investment Corporation of Iridia Limited, Industrial Development Bank of India and other ($140.7 million); and the Government of India ($129.1 million). The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 8.5 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. - 0 -