The World Bank yesterday approved four loans worth $4.345 billion to India, to support the country's infrastructure building and bolster its economic stimulus programme. This loan is second largest volume of lending to a single country in a single year.
The World Bank has also approved loans for projects in five countries, but the loan to India was the largest said the World Bank.
Other loans and credits approved were, €1.0 billion to Hungary, $200 million to Latvia, $71.50 million to Nepal, and $65.2 million to Vietnam.
The first three loans totalling $4.2 billion, while modest in relation to India's $1 trillion economy, will contribute to India's large needs for infrastructure and help bolster the country's response to the global economic and financial crisis and lay the foundations for stronger growth in the future, the World Bank said.
Of the $4.345 billion, $1.195 billion is earmarked to India Infrastructure Finance Company Limited (IIFCL), $1 billion to the fifth Power Sector Support Project and $150 million to the Andhra Pradesh Rural Water Supply and Sanitation Project, while $2 billion is for supporting the Indian banking sector. (See: World bank to lend Rs15,000 crore for PSU banks: report)
The $1.195-billion loan to IIFCL will help partly finance the government achieve its vast infrastructure agenda in the roads, railways and ports sectors. ''Supporting infrastructure investment is particularly important at this time, not just to sustain total domestic demand at a time of global crisis, but also to lay the foundations for stronger economic growth in the future,'' the World Bank.
''This loan will help IIFCL increase the availability of long-term finance for infrastructure projects across a range of sectors including roads, power, airports, and ports,'' said S S Kohli, chairman and managing director, IIFCL.