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The Japan International Cooperation Agency (JICA), a Japanese government body that coordinates aid to other countries, has signed an agreement with India to provide soft loans of up to Rs 11,400 crore for infrastructure development.
The loans will be used for developing the dedicated freight corridor for the Delhi-Mumbai Industrial Corridor (DMIC) project, the metro project in Chennai and a piped water project in Purulia district in West Bengal.
The aid comes at a time when the government is taking measures to revive India’s slowing growth.
"Industrial revival is crucial for economic growth and India’s ambitious DMIC project is vital for promoting direct investment in India as well as Indian exports," said a statement issued by the Japanese agency.
With this objective, ¥136 billion (around Rs 7,840 crore) has been allocated for the dedicated freight corridor project as construction of dedicated freight rail between Delhi and Mumbai forms the base of DMIC. .
JICA will also provide a loan of ¥48.7 billion (Rs 2,800 crore) for the Chennai Metro project. The loan carries a rate of 1.40 per cent and is to be repaid in 30 years with a grace period of 10 years. The executing agency is Chennai Metro Rail Ltd.
Terms and Amounts of Loans
| Project Title | Amount (in Million Yen) | Annual interest rate (%) | Repayment Period (years) | Grace Period (years) | |
| ProjectConsulting Services | |||||
| Dedicated Freight Corridor Project (Phase 2) (II) | 136,119 | 0.20 | 0.01 | 40 | 10 |
| Chennai Metro Project (III) | 48,691 | 1.40 | 0.01 | 30 | 10 |
| West Bengal Piped Water Supply Project (Purulia) | 14,225 | 1.40 | 0.01 | 30 | 10 |
Another loan of ¥14.2 billion (around Rs 820 crore) will be extended for the piped water supply project in Purulia.
The project involves the construction of water supply facilities to provide safe and adequate drinking water to the people in the area. The loan, carrying rate of 1.40 per cent, is to be repaid in 30 years with grace period of 10 years.
The Public health engineering department of the West Bengal government will execute the project.
“Japan is India’s long-standing friend and remains committed to socio-economic development of India. All the three projects will go a long way in meeting this objective,” said Shinya Ejima, the chief representative of JICA in India.
