Announcement of 9.8 Million Dollars Loan for Electric Power in India on May 29, 1957

WORLD ••• (INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET1 N.W., WASHINGTON 251 0. C. TELEPHONE: EXECUTIVE 3-6360 PRESS'~,ftELEASE NO. 483 \\ SUBJECT: :i,;9. 8 million loan for i111ay 29; 1957 electt~ic _power in India 1he World Bank todq made a loan equivalent to i9.8 million for the expansion of a thermal electric power plant at Trombay near Ibmbay. 'lbe additio~. power will help to alleviate the continuing shortage of power in the Bombay area., one of the most important industrial centers in India. The borrowers are The Tata Hydro-Electric Power Supply Company, Li.mi ted, The Andhra Valley Power Supply CoMpany., Li.mi ted and The Tata Power '. • Company, Linli ted. These companies are privately owned and form part ot the group of Tata enterprises which have a long record of successful operation in many different industries in India. The companies operate three lzy'droelectric power stations as well as the Trombay plant; power from their plants., together with power from a small government plant., is fed into the Tata system, which furnishes whol~~sale power in the B::>mb~ region.· 1-, This is 1 the second Bank loan for the Trombay thermal plant; a loan of ,pl6. 2 million in 1954 assist,,d in the cons~ction or the plant 'with two generating units having a combined maximum capacity of 12.$.,000 kilowatts. Todq's loan will help to pay tor. the installation of a thirc.1 unit with I 1 a maxi.mum cap-aci ty of 62 .,.stio kilowatts. At the time of the fi~st Bank loan, a toreca~~ of t.1e power demand ;-;' (\ showed that even af'te~-,. completion of the first two units\ at the Trombay ·- \- . :_ -;:, • plant, there would have to be some restrictions on power w,e in the Ebmbay area, pending completion of a hydroelectr:ic plant which the &mbay State Government planned to build at Koyna., about 140 miles south or bbay. The shortage of power now seems likely to be even more severe than had been  - 2 - forecast because of the rapid growth of induatry. The new or expanding industries in the area include engineering and chemi. cal plants, a rayon plant, a fertilizer plant, further ele~trU"ication ot railways, port facilities and an atomic energy laboratory. iWen with the addition of the third unit at Trombay there will be a shortage of power in the area until the Koyna plant comes into operation. The present expansion at Tranb3¥ will produce power at an earlier date than could be obtained from 8n1' alterriative source and will also provide a desirable hydroelectric-thermal b~ance in the Tata system. The f'll~st unit of t.he Trombay plant ~ame in~o operation in :iJecanber 1956 and the second is coming, into operation next month (June). These uni ts are using by-products from an adjacent refinery as fuel. Toe new unit will be completed in April 1960. It will use coal from central India for fuel, and rill be equipped with coal crushing and handling equipment; it will also be equipped to burn fuel oil, as well as by-products, from the refinery •. The total cost or the e,cpansion will be equivalent to ~14 million. 'lhe · • local currency costs of ~4.2 million will be met by the borrowers .trom their own resources. The Bank's loan or $9.8 million will finance the costs of importing a boiler plant, turbine generator and condensing equipment., accessory electrical equipment and transmission extension, coal handling, coal crushing ·and ash disposal equipment, and otller items.· '!he loan is for a t,erm ot 18 years and bears interest 0£ 5-5/8% including the 1% commission which is .allocated to the &nk's Special Reserve. Amortiza- tion will begin on April 15, 1960. The loan is guaranteed by In<l:i.a and is secured by a Trust Deed., with Baring Brothers & Co. ,,'i Li.mi ted or London, as trustees. After having been apptoved by the Bank• s Execu'ti.ve .Ji.rectors, the . loan •. documents were signed on 1-i.ay 29, 19S7 qy His Excellency O• L. nehta, Ambassador for India in Washington, on behalt of India, by hr. i. T. trlarren; President, Tata Inc., New York, on behalf ot the borrower-3, and br hr. J. Burke Knapp, Vice President, on behalf or the World Bank.