India, ADB sign USD 375 million in loans to approve 2,500 km economic corridor

New Delhi [India], Feb 28 (ANI): The Asian Development Bank (ADB) and the Government of India signed here USD 375 million in loans and grants to develop 800-kilometer Visakhapatnam-Chennai Industrial Corridor, which is the First Phase of a planned 2,500 km long East Coast Economic Corridor (ECEC). The corridor is expected to spur development on India's eastern coast in line with the Government of India's Make in India policy to stimulate manufacturing, and Act East policy to integrate the Indian economy with Asia's dynamic global production networks. The signing event was held on February 23, 2017 followed the ADB approval of USD 631 million in loans and grants in September 2016 to develop the Visakhapatnam-Chennai Industrial Corridor. ADB's approved loans comprise a USD 500 million multi-tranche facility to build key infrastructure in the four main centers along the corridor Visakhapatnam, Kakinada, Amaravati, and Yerpedu-Srikalahasti in the State of Andhra Pradesh. The First Tranche of USD 245 million was signed today that will finance sub-projects to develop high-quality internal infrastructure in two of the four nodes of the corridor Visakhapatnam and Yerpedu-Srikalahasti. Another component of the approved ADB funds signed on 23.02.2017 was a USD 125 million policy-based loan that will be used for capacity development of institutions engaged in corridor management, provide support to enhance ease of doing business and for supporting industrial and sector policies to stimulate industrial development. "ADB is supporting an industrial corridor development approach that involves creation of efficient transport, and reliable water and power supplies in the industrial clusters along with a skilled workforce, to be backed by industry-friendly policies that improve ease of doing business for integration of local economy with global production networks," said L. B. Sondjaja, Deputy Country Director of ADB's India Resident Mission who signed the loan agreement on behalf of ADB. "We estimate that by 2025, annual industrial output along the corridor will increase fourfold to $64 billion from about USD 16 billion in 2015 if investment opportunities are maximized over the next few years," he added. Along with the ADB loans, agreement was also signed for a USD five million grant from the multi-donor Urban Climate Change Resilience Trust Fund that is managed by ADB to build climate change resilient infrastructure. The Government of India will provide extra funding of USD 215 million to the USD 846 million project. Among the outputs envisaged under the USD 245 million tranche one loan include strengthening and widening of a 29.6-kilometer section of state highway to four lanes to improve connectivity from Kakinada Port to National Highway 16, investments in smart water management in Visakhapatnam to reduce nonrevenue water and provide continuous water supply, upgrading seven power substations to supply high-quality and reliable power supply to Visakhapatnam, Naidupeta, and Yerpedu-Srikalahasti industrial clusters, and effluent treatment facility in Atchutapuram and Naidupeta clusters. The tranche one loan will have a 25-year term, including a grace period of five years, a 20-year straight line repayment method at an annual interest rate determined in accordance with ADB's LIBOR-based lending facility. (ANI)