Announcement of The World Bank~^!!^s Credit to Increase India~^!!^s Irrigation in Tamil Nadu on June 21, 1995 : Announcement of The World Bank's Credit to Increase India~^!!^s Irrigation in Tamil Nadu on June 21, 1995

EAT RELEASE The World Bank 1818 H Street, N.W., Washington, D.C. 20433, USA IDA News Release No. 195/80/SAS Contact: Paul Mitchell or Kerry Smyth Tel: (202) 458-1423 or (202) 458-9031 Fax: (202) 522-0321 Internet: pmitchelll@worldbank.org WORLD BANK APPROVES $282.9 MILLION CREDIT TO INCREASE IRRIGATION IN TAMIL NADU NEW DELHI, June 21, 1995 - The World Bank today approved a $282.9 million credit to the Government of India to improve the productivity and sustainability of the irrigation sector in the State of Tamil Nadu. The project will improve performance in the agricultural sector and increase the availability and reliability of water to the state's populace. The credit is made through the International Development Association (IDA), the concessionary lending affiliate of the World Bank. The IDA-assisted project will finance a state-wide program in the irrigation sector. Improvements made under the project will enhance agricultural production in about 50 percent of the State's surface irrigated area. This will directly benefit four million people; of that group, 70 percent occupy small farms. To ensure the sustainability of the irrigation sector improvements, rehabilitation and modernization of the systems, linked with farmer participation, upgraded maintenance, water management, and cost recovery, the following steps will be implemented: system rehabilitation and modernization, farmer p*articipation, maintenance upgrades, water management, and cost recovery. A special state water agency has also been created and will be strengthened by upgrading technical capabilities in water planning and environmental management. This will generate broad and long-term benefits essential for Tamil Nadu's economic development. Water is an increasingly scarce resource in India. Irrigation accounts for about 93 percent of present gross water use, and the expansion of irrigation networks has had a major impact on the agricultural sector. The supplies of water, however, are still limited. Available water resources are increasingly be allocated for the needs of urban and rural communities, industry and power, and environmental protection. These other sectors, compared to agriculture, can expect to grow rapidly. Effective planning and management of the water sector is critical, not just to agriculture, but to India's overall economic development. The State of Tamil Nadu, at the southern tip of India, has an area of 130,000 square kilometers (50,180 square miles) and a population of 56 million, two-thirds of whom live in rural India: Tanil Nadu Irrigation 1 of 2 Archives/Records Center, H 61-001 ( 1) areas. Relative to the rest of India, Tamil Nadu suffers from severe water shortages. The cultivated agricultural area is 5.9 million hectares (14,579 acres); 41 percent of that land is irrigated. Annual production of foodgrains have increased, but not at the same rate as the population growth, and in drought years, Tamil Nadu has imported food from other states. To assist in alleviating these problems, the project's primary objectives will be to: * introduce water resources planning by river basins and across sectors; * improve agricultural productivity; * assure sustainability of water infrastructure and environmental quality; and * improve institutional and technical capabilities for managing the state's water resources. To achieve these objectives, the project has five main components: * Systems Improvement and Farmer Turnover. This will improve agricultural productivity through rehabilitation and modernization of the existing irrigation systems, coupled with active farmer participation. This participation will forge a private sector role in infrastructure management and foster the participation of women and minorities in irrigation's management and benefits. * Scheme Completion Investments. This component will enable complete viable investment on existing schemes for increased availability and reliability of water; * Water Planning, Environmental Management, and Research. This will build capacity for multi-sector water planning, incorporate environmental management in all aspects of water planning, investment and management, and to enhance research in the water sector; * Institutional Strengthening. This component will strengthen Tamil Nadu's Water Resources Organization (WRO) to strengthen its capabilities in all professional and management areas; and * Land Acquisition and Economic Rehabilitation. This will assist persons affected by the project. The total cost of the WRO program is $491 million. The project's investment costs total $315.6 million: the IDA loan is $282.9 million; the Government of Tamil Nadu (GOTN) contributing $32.7 million. Recurrent costs of $175.4 million for the operation of a more efficient and enhanced WRO will be financed by the GOTN. The IDA loan is made under standard terms with 35 years maturity. NOTE: All money figures are expressed in dollar equivalent. India: Tamil Nadu Irrigation 2 of 2