Andhra Bank has pledged Rs 1,300-crore loan for first phase construction of Kaleshwaram lift irrigation project, for which the Telangana government has been raising funds from banks and financial institutions.
The consortium of lenders led by Andhra Bank has estimated the project cost in phase one to be about Rs 7,400 crore, the government said.
Andhra Bank managing director Suresh N Patel today handed over the loan sanction letter to chief minister K Chandrasekhara Rao.
Andhra Bank is also extending Rs 1,935 crore loan for Telangana government's drinking water grid project( Mission Bhagiratha), Rs 1,000 crore to the state civil supplies corporation and Rs 400 crore to the state seed development corporation, Patel informed on this occasion.
Using loans from the public sector and commercial banks to fund such a massive water projects was a relatively new trend started by Telangana government.
In the past, the government had taken up such irrigation projects by making the necessary allocations in their successive annual budgets or by tapping soft loans from multilateral lending institutions such as the World Bank.
More From This Section
The present move comes on top of huge budgetary allocations made by the government in the last couple of years, even though the budgetary spending was often fell short of the allocations owing to the resource gap among other reasons.
In the current annual budget, Telangana government has announced a whopping Rs 25,000 crore for the irrigation projects, which was unprecedented in the history of irrigation projects in the undivided Andhra Pradesh. The government had also declared that it would allocate Rs 25,000 crore every year so that all the irrigation projects, which require an estimated Rs 1 lakh crore, will be completed in five years.
In addition to the irrigation projects, the government was implementing a massive water grid project, in the name of Mission Bhagiratha, with an aim to provide piped water to every household in Telangana by 2019. This alone is expected to cost more than Rs 40,000 crore.
Chief minister K Chandrasekhar Rao was depending heavily on loans to complete this yet another flagship project of his government.