Announcement of Twenty-Five Million US Dollars Loan for Electric Power in India on July 23, 1958

0 .. FOR IMMEDIATE RELEASE WOIILD • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPf\/iENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 ,PRESS RELEASE NO. 547 SUB,TECT: $25 million loan for July 23, 1958 .electric power in Inclia The World Bank today made a loan of $25 .million to India fof projects to increase the supply of electric power in the Ds:mocar Valley, the heart of India's heavy industry. These ."~'.:'tr:~jects will add 225,000 kilowatts of thermal generating \ capacity to the power ~ys~~m of the Damodar Va]\l.ey Corporatio:n. )} ~,· ' The Damodar Valley Corporation (DVC) is a:· semi-autonomous organization established . in 1948 to execute a scheme for the unified development of the Damodar Valley lying northwest of Calcutta in the Stat~s of Bihar and West Bengal. DVC's • activities include the provision of electric power, flood control, irrigation and drainage, land conservation and afforestation, and promotion of the health and general welfare of the inhabitants of the Valley. Capital requirements o:f' the DVC are provided by the Central Government and by the Governments o:f' Bihar and Bengal. The Damoc1ar Valley, because of its rich mineral resources, has become the most highly industrialized region in India. In the Valley area oze ~st of India's iron ore ar{B. about three quarters of its coal, mica and chromite. It is the site of the two largest iron and steel mills, and a third is now being built at Durgapur. The supply of coal, iron and steel has been the basis for the estab- lishment of a wide variety of industries L.'"1. the Valley -- steel faQricating planta, locomotive works, foundries, plants for the manu:f'acture of wire, cable, pipes and • machine tools,. and :many others. It also has aluminum and cement plants and a large fertilizer plant. The main railways running through the Valley furnish direct transportation for the raw mat~rials and products of the rest of India; and the nearby port of Calcutta is the outlet for its foreign trade.  ,.. ·. - 2 - Since its inception ten years ago, the DVC has embarked on a number of pro- • jects within its field of operation and Bank loans totaling $27 million, ·made in 1950 and 1953, have helped to finance some of them. The most significant unc1er- takings of DVC thus f'ar have been the building of four larce ·multipurpose dams for the storage of flood waters, electric power generation anc1 irrigation; a 150,000- kilowatt thermal power plant at Bokaro -- the largest thermal plarit in South Asia; a power transmission nnd distribution .,system; s,n irrigation barrc~Be at Durgapur anc1 a canal system to irrigate abo,it one millicxa. acres of land in the lower Valley. Some of tly:';se projects have been completed an1 all will be finished by the ena_ of 1959. The loan made today will help to finance the installatj_on of an additional 75,000 kilowatts of ge2.1.erating capacity at the Bokaro thermal plant; a new 150,000- kilowatt thermal power station which will be adjace_jt to tl:e Government.' s new . I steel mill now under construction at D'urgapur; and additional transmission and • distribution :facilities. Waste products :from the steel mill will be used as fuel for the Durgapur power plant, thus effecting i"rr..portant economies for both under- takings. The total ccst of the projects is estimated at the equivalent of $56 million; the Bank's loan will cover most of the foreign exchange requirements. Construc- tion of the projects is now under way and is sch2dulec1 for completion by 1960. Power from the DVC system is transmittecl over a 1,000-mile network through- out an area extending 125 miles on each side of the Damndar River. Its chief customers are fcur large utilities, two state agencies which supply power for urban and rural electrif~f.!ation in Bihar and Bengal, two railways, and a number of j\arge industrie.s including the Tata Iron and Steel Company, Indian Iron and \\ \\ Steel Company and Cl1ittaranjan Locomotive Works. A recent survey shows that the • DVC must more than triple its generating capacity -- to about 700,000 kilowatts by 1962 if it is to meet the expected de,mand of this rapidly growing industrial  . . ~• •• ~'!l,......~ ... • '• •• l -3- area. The projects for which today's loan were ·ma.de will partially meet this • need by increasing the capacity of the DVC's sys-tem to 480,000 kilowatts; pians for more large thermal installations have already been made. The loan is for a term of 20 years and bears interest of' 5-3/8%, including the 1% comm.ission which is allocated. to the Bank's Special Reserve • .A:mortization will begin Ausust 1, 1961. After having been approved by the Bank's Executive Directors, the loan 'agreement was signed by Mr. Harishwar Dayal; Minister, Char r;e d 'Affaires a. i. of the Embassy of India. in Washington, on behalf of' the Government of India, and by Mr. Eugene R. Black, President, on behalf of the World Bank . • • .