The Hindu : New Delhi News : Centre signs $485 million pact with World Bank

Online edition of India's National Newspaper
Wednesday, Feb 14, 2007
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New Delhi

New Delhi

Centre signs $485 million pact with World Bank

Special Correspondent

NEW DELHI: The Centre on Monday entered into a tripartite agreement with the World Bank for a loan worth $ 485 million for funding Tamil Nadu's irrigated agriculture modernisation and water bodies restoration and management project.

The credit agreement was inked, in the presence of Finance Minister P. Chidambaram, by Madhusudan Prasad, Joint Secretary, Department of Economic Affairs (DEA), on behalf of the Centre, S. Rajaretinam, Secretary, Public Works Department, Tamil Nadu and World Bank's Regional Vice-President, South Asia, Praful Patel.

The funded project, according to an official statement here, is designed to modernise irrigation systems covering over six lakh hectares in 63 selected sub-basins throughout the State. It envisages an integrated sub-basin approach to synergise the activities of multiple agencies involved with irrigation, on-farm development, agriculture, horticulture, marketing, livestock, fisheries and applied research. Tamil Nadu is home to about 62 million people living in 17 river basins. Many of these basins are water-stressed, as supplies are limited and competing demands are growing, the statement said.

Of the $485-million loan, $335 million is from the International Bank for Reconstruction and Development (IBRD). The loan has a maturity period of 20 years, including a five-year grace period. The balance $150-million credit is provided by the International Development Association (IDA), the World Bank's concessionary lending arm. This has a maturity period of 35 years with a grace period of 10 years.

Minister said: "Traditional water bodies have been the backbone of irrigated agriculture in Tamil Nadu from time immemorial. Restoration of these water bodies is a key element in unlocking the potential of agriculture development and improving livelihoods of the people. Over 50,000 jobs are expected to be created in on-farm and off-farm activities in the project area."

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