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– Ramesh Sharma

Aiding development: The Japanese Ambassador, Mr Yasukuni Enoki, exchanging documents with the Joint Secretary, Department of Economic Affairs, Mr Kumar Sanjay Krishna, in the Capital on Tuesday.

Our Bureau

New Delhi, Aug. 14 Japan on Tuesday agreed to provide soft loans worth Rs 1,345 crore (Yen 39,555 million) to India as its first batch of official development assistance (ODA) for financial year 2007-08.

An exchange of notes to this effect took place at North Block here between Mr Kumar Sanjay Krishna, Joint Secretary (bilateral cooperation), Finance Ministry and Mr Yasukoni Enoki, Ambassador of Japan to India.

As per the recently introduced double track mechanism, ODA loans from Japan to India would be provided in two batches. It is India specific in view of the country being as the largest recipient of Japan’s ODA.

Under today’s agreement, two projects will receive the soft loan assistance through the Japan Bank for International Cooperation (JBIC). While the Maharashtra Transmission System project would get Rs 570 crore (16,749 million yen), the Goa water Supply and Sewerage project would get Rs 775 crore (22,806 million yen).

The Maharashtra Transmission System project gets loan assistance of Rs 570 crore at interest rate of 0.75 per cent per annum with repayment period of 15 years including the grace period of 5 years. On the other hand, the Goa water supply and sewerage project would get loan assistance of Rs 775 crore at interest rate of 1.3 per cent per annum with the repayment period of 30 years including grace period of 10 years.

The main objective of Japanese loan assistance is to support India in establishing physical infrastructure to boost and sustain economic growth. At the same time, Japanese assistance seeks to support India’s efforts to alleviate poverty. In keeping with these goals, the loan package strategically covers power distribution, water supply and sewerage projects.

In financial year 2006-07, Japanese Government provided Rs 6,916 crore of soft loans to Indian projects under the ODA. A statement said that the total ODA loan commitment including the latest batch of loan stood at about Rs 93,967 crore. At present 54 projects are being implemented in India with Japanese loan assistance of Rs 28,527 crore.

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