Three large projects will help India sustain growth during the global economic crisis and lay the foundations for stronger growth in the future.
WASHINGTON: 22 September 2009: The World Bank Ruesday approved four loans worth 4,345 billion US dollar (ca. 22 milliarder DKR) for India. They will bolster infrastructure and power transmission networks and enable public sector banks to expand credit. This is the second largest volume of lending to a single country in a single year.
The first three loans totaling 4,2 billion dollar, while modest in relation to Indias 1 trillion dollar economy, will help bolster the country’s response to the global economic and financial crisis and lay the foundations for stronger growth in the future:
* The Banking Sector Support Loan: 2 billion
* Support for the India Infrastructure Finance Company Limited (IIFCL): 1,195 billion
* The Fifth Power Sector Support Project: 1 billion
* The Andhra Pradesh Rural Water Supply and Sanitation Project: 150 million
While Indias economy grew at 6,1 per cent in the first quarter of the current fiscal year (2009-10) – among the highest growth rates in the world – this is a significant dip from the annual peak of 9,7 per cent in 2006-07. High growth is critical for Indias economy, especially to sustain its battle against poverty.
Banking Sector Support Loan
The World Banks Banking Sector Support Loan for 2 billion dollar will enable Indias public sector banks to expand credit for the development of infrastructure, small and medium enterprises, and the rural economy, and strengthen them for the phase of economic recovery ahead.
Support for Infrastructure
The World Bank will also support the India Infrastructure Finance Company Limited (IIFCL) with 1,195 billion dollar to help the Government of India achieve its vast infrastructure agenda in the roads, railways and ports sectors.
Supporting infrastructure investment is particularly important at this time, not just to sustain total domestic demand at a time of global crisis, but also to lay the foundations for stronger economic growth in the future.
Support for Power Transmission Networks
The Fifth Power Sector Support Project for 1 billion dollar will help Powergrid, the national power transmission utility, to expand the power transmission network especially in the western, northern and southern parts of the country to meet rising consumer demand.
These loans will be financed by the International Bank for Reconstruction and Development (IBRD) with a maturity of about 30 years.
The Bank also approved 150 million dollar for the Andhra Pradesh Rural Water Supply and Sanitation Project, designed to improve water supply and sanitation services in 2.600 villages across 6 districts of the state. It aims, too, to provide piped water to 2,1 million people and extend sanitation services to 1 million people who currently do not have access.
This loan will be financed by the International Development Association – the World Banks soft-lending arm.
Kilde: www.worldbank.org
