Announcement of India to Build One Billion Dollar Power Plant on June 18, 1984

FOR IMMEDIATE RELEASE lWorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 84/97 Contact: P.B. Sison June 18, 1984 (202) 477-3573 INDIA TO BUILD $1 BILLION POWER PLANT India's efforts to improve the supply of electric power in the eastern region of the country, comprising the states of West Bengal, Orissa, and Bihar, will be assisted by a World Bank loan of $300.8 million. The loan will help finance the addition of 1,000 megawatts (MW) of thermal capacity at the Farakka power plant in West Bengal at a total cost of $1.1 billion. The Farakka project will be implemented by the National Thermal Power Corporation over a seven-year period ending in 1991. It includes the installation of two 500 MW generating units, civil works and services, and the construction of 640 kilometers of transmission lines. The Farakka plant is one of six large-scale thermal power plants owned by the Indian Government, and the fourth of a series being supported by The World Bank. The total installed capacity in the eastern region of India was about 5,800 MW as of March 1983. Potential peak demand in the region is expected to grow by about 8 percent a year until 1995. The Farakka project represents the least costly means of expanding the eastern regional system and will help alleviate power shortages in the region, which have led to widespread rationing and overloading of existing thermal units. The loan underlines the importance that India and the Bank attach to expanding the electric power supply to meet the growing needs of the country's industrial and agricultural sectors. Since 1954, the Bank and its affiliate, the International Development Association (IDA), have lent a total of about $3.7 billion for the development of electric power in India. The Bank's assistance is aimed at supporting India's efforts to eliminate power shortages through the expansion of generating and transmission capacity, and measures to improve the operation and maintenance of existing plants. It aims also to introduce nationwide long-range system planning to ensure that the least costly means of developing power are implemented. Projects assisted by the Bank also include measures to strengthen the technical and financial management of institutions in the power sector. The World Bank loan is for 20 years, including five years' grace, with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.