The World Bank today approved four loans worth $4.345 billion
Three loans totaling $4.2 billion will help India sustain growth
Loans will bolster infrastructure and power transmission networks and enable public sector banks to expand credit.
September 22, 2009: At the request of the Government of India, the World Bank today approved four loans worth $4.345 billion. This is the second largest volume of lending to a single country in a single year.
Of this, the first three loans totaling $4.2 billion, while modest in relation to India's $1 trillion economy, will contribute to India's extraordinarily large needs for infrastructure and help bolster the country's response to the global economic and financial crisis and lay the foundations for stronger growth in the future:
The Andhra Pradesh Rural Water Supply and Sanitation Project: $150 million
While India’s economy grew at 6.1% 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% in 2006/07. High growth is critical for India’s economy, especially to sustain its battle against poverty.
Roberto Zagha, India Country Director speaks of the significance of these loans
Banking Sector Support Loan The World Bank’s Banking Sector Support Loan for $2 billion will enable India’s 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 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 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 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 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 Bank’s soft-lending arm.
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