Lok Sabha Question No. 2508 (UNSTARRED), answered on 2018-03-09
Subject: Loan Agreement with New Development Bank
Ministry: FINANCE
Asked by: P.R. SUNDARAM, HEENA VIJAYKUMAR GAVIT, JAYAKUMAR JAYAVARDHAN, SUPRIYA SADANAND SULE, VIJAYSINH MOHITE PATIL

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFARRS

## LOK SABHA UNSTARRED QUESTION No 2508 TO BE ANSWERED ON MARCH 9,2018

## LOAN AGREEMENT WITH NEW DEVELOPMENT BANK

- 2508, SHRIPRSUNDARAM, DR HEENA VIJA YKUMAR GAVIT, VIJAYSINH SHANKARRAO

## Will the Minister of FINANCE be pleased to state:

- a. whether his Ministry has signed second Ioan agreement for financing of Rajasthan Water Sector Restructuring Project for Desert Areas with New Development Bank
2. recently;
3. b if SO, the details thereof along with terms and conditions thereof;
4. C\_ the aims and objectives of said loans with ongoing projects in association with NDB; along
- d. the quantum of loans provided by NDB and the time by which it is likely to be released; and
- e. the benefit  that would accrue   from  this   agreement   along with of international loan agreement signed by India with various international organizations/ banks for development projects during the last three years and the current year?

## ANSWER

## MINISTER OF STATE IN THE MINISTER OF FINANCE (SHRI PON. RADHAKRISHANAN)

- The terms and conditions for the loan  agreement   signed  between Government of India and New Development Bank (NDB) for *Rajasthan Water Sector Restructuring Project for Desert Areas' is at Annexure.

(c) and (d): The Rajasthan Water  Sector Restructuring Project  for Desert Areas aims to rehabilitate 678 km long Indira Gandhi Canal system in order to prevent seepage, conserve water; and enhance water use efficiency. Other than the Rajasthan Water Sector Restructuring Project for Desert Areas, another ongoing project in India in association with NDB is the 'Development and Upgradation of Major District Roads in Madhya Pradesh" which  aims to upgrade major district roads in the State of Madhya Pradesh to improve connectivity of the interior areas of the state with the national and state highway networks and resultant boost to economic activity in the rural hinterland. New Development Bank has released INR 1,372,057,943 (USD 21,371,643.82) till 8uh March 2018, for the Development and  Upgradation of Major District Roads in Madhya Pradesh. released by NDB based on the reimbursement claim submitted by the project implementing agencies.

(e): The benefits of the Rajasthan Water Sector Restructuring Project would be arresting the seepage by rehabilitating the deteriorating canal lining of the Indira Gandhi Nahar Project (IGNP), rehabilitation of waterlogged areas; modernization and optimization of the irrigation management practices in the project area by involvement of the water users associations (WUA) in the command area and strengthening of drinking water  supply and  irrigation facilities in the project area. Similarly, the Development and Upgradation of Major District Roads in Madhya Pradesh Project would   improve  transport  connectivity to the interior regions and resultant boost to economic activity in the rural hinterland through upgradation, rehabilitation o reconstruction of approx: 1,500 km of district roads to intermediate lane, allweather   standards, with road   safety features and   improved road asset maintenance management: The number of international  loan agreement signed by India with  various international organizations/ banks for development projects during the last three years and the current year is given below:

| Year    |   Number of Loan Agreements Signed |
|---------|------------------------------------|
| 2014-15 |                                 47 |
| 2015-16 |                                 58 |
| 2016-17 |                                 55 |
| 2017-18 |                                 33 |

## Annexure

ANNEXURE REFERRED TO IN REPLY TO PARTS (a) and (b) OF LOK SABHA UNSTARRED QUESTION 2508 FOR MARCH, 2018 ASKED BY SHRLPRSUNDARAM, DR HEENA VIJAYKUMAR GAVIT, DRJJJAYAVARDHAN; SHRIMATI SPURIYA SULE AND SHRI MOHITE PATIL VIJAYSINH SHANKARRAO REGARDING LOAN AGREEMENT WITH NEW DEVELOPMENT BANK 9th

Statement indicating terms and conditions ofthe Loan Agreement between the Government of India and New Development Bank for the Rajasthan Water Sector Restructuring Project for the Desert Areas

| Loan Amount       | USD 100 million                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Currency          | USD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Payments          | Loan amount to be back in 38 semi-annual installments paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Grace Period      | Six Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Project Entity    | Water Resources Department; Government of Rajasthan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Front End Fee     | 0.25% (Zero Decimal Two Five Percent) of the Loan amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Commitment Charge | The commitment charge payable is 0.25% (Zero Decimal Two Five Percent) effective 60 (Sixty) days from the date of signing of the Loan Agreement; calculated on the following basis: 1. 12 (Twelve) months after the date of signing of the Loan Agreement; on 15% (Fifteen Percent) of the Loan amount less amounts disbursed; ii. 24 (Twenty Four) months after the date of signing of the Loan  Agreement; on  45% (Forty Five Percent) of the Loan amount less amounts disbursed; iii. 36 (Thirty Six) months after the date of signing of the Loan Agreement, on 85% (Eighty Five Percent) of the Loan amount less amounts disbursed; and iv. Thereafter; on the entire undisbursed Loan amount: Provided however that if the amount disbursed at the end of the first year, second year and the third year after date of signing of |

|          | the Loan Agreement exceeds respectively, 15%, 45% and 85% of the Loan amount; then the commitment charge shall be NIL.                                                                                                                                                  |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Interest | Interest shall be payable at the Interest Rate which shall be a sum of the LIBOR (which is calculated on & 6 monthly basis) and the Spread which shall mean 1.20% p.a: (One Decimal Two Zero Per Cent PerAnnum):                                                        |
| Others   | The Government of India shall cause the Project Entity (Water Resource Department;, Government of Rajasthan) to comply with the NDB Procurement Policy (as amended from time to time) and NDB Environment and Social Framework   Policy (as amended from time to time): |