Announcement of IDA to Help Finance Rural Electrification Schemes in India on May 24, 1979

' . ·FOR ·tMMEDIATf RELEASE a •world Bnk 1818 H Street, N.W., Washington, D.C.20433, U.S.A.• Telephone: (202) 477�1234 IDA NEWS RELEASE NO. 79/77 HAY 21t, 1979 IDA TO HELP.FINANCE RURAL ELECTRIFICATION SCHEMES IN INDIA- The International Development Association (IDA), the Worl d Bank's affiliate for concessionary lending, has announced a $175 million credit for a rural electrification project in India. The credit .wi l 1 support the overal 1 lending program of Rural Elec­ trification Corporation Limited (REC). It wlll help finance about 1,700 rural electrification schemes of the State Electricity Boards (SEBs) in 14 states. The credit will also be used to assist REC in carrying out two pilot schemes"".-a single phase scheme in Rajasthan State and a power factor control scheme in Karnataka State. The Draft Plan (1978/79-1982/83) for India's development emphasizes the. importance of providing for the basic needs of people in low-income groups. Ttils project is expected to benefit .approximately 2.5 mi 11ion house­ holds in 15,000 villages. In addition, about 500,000 pumps will be elec­ trf f!ed. Considerable cost savings are expected to accrue t.o the economy from using electricity instead of other non-electric energy sources, parti­ cularly In small-scale irrigation and rur�l indust�ies. Additional benefits include increased agricu1t�r�1 production and improvement in the quality of life in rural areas. Jobs for landless laborers are expected to result from irrigation-induced double cropping. The Indian government is providing $113 million in loans. The Agri­ cultural Refinance and Development Corporation will provide $56 m i 11ion, and other domestic financial institutions will make $56 million available for the project. . . The IDA credit will be for 50 years, including lO years of grace. There is no interest charge, but 3/4 of 1% per year will be charged to cover administrative expenses. NOTE Honey figures are expressed in U.S. dollar equivalents. FORr-.1 NO. 1121 • (5-76) T ECHNI CAL D A T A PROJECT: Second Rural Electrification COUNTRY: India TOTAL COST: $400 mi 11 ion IDA FINANCiNG: $175 mill ion, standard IDA terms OTHER FINANCING: Gove rn men t of I nd i a (GO I ) , $ 11 3 mi 1 1 ion Domestic financial institutions, 56 million Agricultural Refinance and Development Corporation (ARDC), $56 million IMPLEMENTING ORGANIZATION: Rural Electrification Corporation Limited (REC) nn11 n .. :1.J: __ LILI/'"\ UUI I U I I I Y Nehru Place New Delhi , India Cable Address: RECTrlC, New Delhi PROJECT DESCRIPTION: The project will support REC's overall lending programs. It will help finance about 1,700 rural electrification • schemes meeting agreed criteria, introduce improved appraisal techniques and assist REC in carrying out two pilot schemes. PROCUREMENT: All items will be procured through international competitive bidding except for miscellaneous equipment and materials (such as i ns u l a t e d wi re , a i r b r ea k s wi t c hes and 1 i g ht n i ng a r rest e rs ), wi th a tot a 1 va 1 u e of nb more than $25 mill ion,which will be awarded through local competitive bidding using a standard procurement format to be prepared by REC for eligible State Electricity Boards (SEBs) and approved by the Association. Each SEB will invite bids for its two-year materials requirement. All contracts for equipment and materials of $100,000 or more will be subject to prior review by the Association. Indian manufacturers will be granted a preference margin of i5% of the c. i.f. cost or the current rate of import duty, which- ever is 1ess. CONSULTANTS: Consultant services will be provided to carry out pilot schemes upon mutual consultation. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: About 40% • 1983 -._,,,.0. . .--~--