Rs 365 crore loan to develop urban infra in Odisha

Bhubaneswar: India and Germany today signed agreements for a Rs 365 crore loan to develop urban infrastructure in Odisha.

"A new chapter has opened in urban infrastructure financing in the state with the execution of agreements between Government of India and KfW, Germany on the one hand and Government of Odisha, Odisha Urban Infrastructure Development Fund and KfW on the other," secretary of housing and urban development department Injeti Srinivas said.

Four agreements were signed for loan agreement, financing agreement, project agreement and separate agreement. Under the agreements, KfW would give loan assistance of 50 million Euro and technical assistance grant of 2.5 million Euro, Srinivas said. The Government of Odisha also is contributing five million Euro to the seed capital of the fund and 0.5 million Euro towards technical assistance grant.

"The tenure of the loan will be 15 years, including a moratorium of 5 years. The loan shall carry a concessional rate of interest of 1.875 per cent per annum. The Government of India shall pass on the loan to the state government on a back to back basis and the state government in turn will pass it on to OUIDF in a 50:50 ratio of loan and grant," he said.

The loan will be drawn in four years starting from current fiscal (2012-13). The fund will be utilized mainly for water supply, sewerage, solid waste management, drainage and slum development projects. It was expected that the fund would encourage private investors to avail the funding to set up projects on PPP basis, official sources said.

The fund would be managed by a trust headed by the chief secretary and the project executing agency would be headed by the Principal Secretary, Housing & Urban Development Department, they said. The trust would be provided technical assistance by an asset management company, which would be selected through a competitive bidding process.