Announcement of India to Increase Thermal Power with World Bank Loan of Three Hundred Million Dollars on December 24, 1981

_? • ~ FOR IMME01AT~ . . Rflf ASl: - - . ".•World Bank ,; 1,818 H S,tr~et, N.W., Washington, D.C. 2043J, U.S.A.• Telepho~e: (202) 477~1234 BANK NEWS RELEASE No. 82/34 Contact: Sundaram Sankaran December 24, 198'1 (202) 477-3962 INDIA TO INCREASE THERMAL POWER WITH WORLD BANK LOAN OF $300 MILLION The capacity of the Ramagundam thermal power station in the State of Andhra Pradesh, ~ndia, will increase with the assistance of a $300 million loan from the World Bank. The second Ramagundam project, featuring the installation of three 500 megawatt (MW) generating units, will cost a total of $1,567.5 million. The World Bank loan is expected to be complemented by a $150 million loan from the Federal Republic of Germany and a $30 million loan from the OPEC Fund. The Government of India will supply the remaining $1,087.5 million in loan and equity, to the National Thermal Power Corporation limFced. The power project, including ancillary equipment and related facilities, ls justified as the least-cost solution to meet part of the projected base load demand ir/ the Southern Region from 1987/88 onwards. In addition to the power unit, the project includes the construction of about 1,400 kilometers of associated 400 kilovolt transmission lines. The Ramagundam development offers economies of scale end relatively loti fuel costs due to its location at a coal pithead . . Power supply is closely related to the growth of India's economy. The improvement of the standard of living depends to a large degree on the development of the power sector, which now takes the largest share of India's public investment resources -- 12% of the Sixth Five-Year Plan outlay. In spite of this emphasis, power shortages have persisted in many parts of the country. The World Bank loan of $300 million to India will be repaid over 20 years, including five years of grace, with interest at 11.6% a year. ,. NOTE: Money figures are expressed in U.S. dollar equivalents.