Announcement of Large-Scale River Development Program in India Attracts Bank, IDA Financing on March 11, 1985

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 85/31 Contact: P.B. Sison IDA NEWS RELEASE NO. 85/40 (202) 477-3573 March 11, 1985 LARGE-SCALE RIVER DEVELOPMENT PROGRAM IN INDIA ATTRACTS BANK, IDA FINANCING A long-term program to develop multipurpose hydropower and irrigation dams on the Narmada River is being launched in west-central India. The World Bank and its affiliate for concessionary lending, the International Development Association (IDA), will support the first phase of the program with a loan and two credits totalling $450 million. The total cost of the two projects is expected to be about $2.5 billion. The Narmada is the largest westward-flowing river in India. It rises in eastern Madhya Pradesh and discharges into the Gulf of Cambay, draining some 98,800 square kilometers in the states of Madhya Pradesh, Gujarat, and Maharastra. The plan for the development of the Basin currently envisages the construction of 30 major irrigation, hydropower, and multipurpose projects. Some 400 medium-sized schemes are also included. The development program is expected to take 40-50 years to complete. About five million hectares of agricultural land will be irrigated and at least 2,700 megawatts (MW) of hydropower will be provided when the program is completed. The first phase consists of a hydroelectric power project and an irrigation project. Together, the projects will harness and regulate the flows of the Narmada River to establish reliable and efficient supplies of hydroelectric power for the country's western region, and of irrigation water for the drought-prone areas in Gujarat and Rajasthan. The Sardar Sarovar Dam and associated canal and drainage networks will be the largest irrigation system in India to have been planned and designed as one unit. The design and construction will permit a higher degree of efficiency than has been achieved previously in projects in the power and irrigation sectors. The Sardar Sarovar Dam and Power Project A concrete gravity dam will be built, creating a reservoir with usable storage of 5,800 million cubic meters. An underground powerhouse will be built in the right abutment of the dam to house six 200 MW reversible turbine-generator units. Another powerhouse at the head of the main irrigation canal will house five conventional turbine-generator units of 50 MW each. NOTE: Money figures are expressed in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit. -2- The project will also include ancillary rock fill dams, link channels, a saddle dam, a weir downstream of the main dam to facilitate pump-back storage, and a bypass tunnel for use when the powerhouse is not in operation. Power transmission lines consisting of 400 kv double-circuit transmission lines will also be built. And a flood-warning network will be established. Insitutions will be established and funded to design, implement, monitor, and evaluate comprehensive programs for the resettlement and rehabilitation of communities displaced by the dam and reservoir. The project will also fund technical assistance for training in environmental sciences, resettlement, and rehabilitation. The World Bank will provide a loan of $200 million and IDA, a credit of SDR 99.7 million ($100 million). Other financing will come from the Government of India; the State Governments of Gujarat, Maharashtra, Madhya Pradesh, and Rajasthan, and possibly suppliers' credits. The World Bank loan is for 20 years, including 5 years' grace, with a variable interest rate, currently 9.29 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). The Water Delivery and Drainage Project The project includes the construction of 438 km of main canal. Aqueducts, canal crossings, control structures, and road and railway bridges will also be built. An open channel flood drainage system will be constructed and tubewells will be installed for groundwater drainage. Service roads will be built and the existing road network will be improved. A communication and remote control system will be established to link the project control center with area control centers and the network's flow control points. The project will fund training programs on environmental protection and project operation and maintenance. IDA is providing a credit of SDR 149.5 million ($150 million). Other financing will come from the State Governments of Gujarat and Rajasthan. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances).