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26 April 2006 - The Japan Bank for International Cooperation (JBIC) has signed loan agreements totalling ¥66 950m ($582.4m) with the Indian government and the Rural Electrification Corporation Ltd for pumped storage power generation, water supply and rural electrification projects in India.
A share of the funds will be used for creating India's largest pumped storage power plant. To be constructed in West Bengal, the Purulia Pumped Storage Project III will have an installed capacity of 900 MW.
Nearly ¥18m will be used for procuring power generation facilities, civil works and consulting services. The loan will be the third and final finance package the bank has provided for the project. After two loans of around ¥20m each were issued in 1995 and 2004.
The project will relieve power shortages in the region caused by industrialization, which has raised power demand by an annual average of 5-6 per cent over the last decade. The area faces a shortage of 7 per cent of total demand at peak times.
The Rural Electrification Corporation for the Rural Electrification Project will receive ¥20 629m for the construction of a power substation and the development of power distribution networks in Adhra Pradesh, Mahhya Pradesh and Maharashtra.
The funds will help supply electricity to 2.79 million households, contributing to the Indian government's target of securing access to electricity for all households by 2009.
Japan is increasingly focusing on India as a promising market for trade and foreign investment. Results of the JBIC Financial Year 2005 survey rated India as the second most promising country for investment after China.
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