Two water resources projects in India get World Bank funding

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• Effort seeks to improve water sector management, reduce industrial pollution in India

WASHINGTON, DC, June 3, 2010 -- The World Bank today approved two projects worth US$515 million to India, consisting of a US$450.60 million loan for the Andhra Pradesh (AP) Water Sector Improvement Project and a US$64.15 million loan/credit for the Capacity Building For Industrial Pollution Management Project.

The AP Water Sector Improvement Project is designed to strengthen the State's institutional capacity for multi-sectoral planning, development and management of its water resources. It seeks to improve irrigation service delivery on a sustainable basis to increase productivity of irrigated agriculture in the Nagarjuna Sagar Scheme (NSS), a large multipurpose water project which generates hydro power, supplies water for industries, rural and urban drinking water and irrigation water to about 0.9 million hectare area. Poor maintenance and irrigation management over the past 40 years has left the system in a deteriorated condition, leaving tail-end areas without adequate water.

"Agriculture is a vital sector in Andhra Pradesh, contributing about 29 percent of its GDP and employing the majority of the rural population," said R S. Pathak, World Bank Sr. Irrigation Engineer and project team leader. "This project will contribute to the rehabilitation and modernization of NSS, and restructuring of water sector institutions in AP state to improve their capacity to effectively manage their water resources and delivery of irrigation services. In combination with strengthened agricultural support service delivery and improved marketing arrangements, these interventions will enhance farmer's ability to increase the productivity of water in the project area."

The Capacity Building for Industrial Pollution Management Project is designed as a pilot in response to the abundance of contaminated areas located across India. According to a recent Government of India report, there are about 36,000 industries in the country which generate about 6.2 million tons of hazardous waste annually. At a number of locations, significant quantities of industrial sludge and effluents laden with heavy metals are dumped in open areas, in rivers, around residential compounds, and on farm land. Such toxic dumps have contaminated soil and groundwater, affecting the health of local communities.

The project aims to support the development of a policy, institutional and methodological framework for the establishment of a National Program for Rehabilitation of Polluted Sites (NPRPS) to address orphan contaminated sites. The project will also build tangible human and technical capacity in selected state agencies for undertaking environmentally sound remediation of a number of pilot polluted sites.

"The implicit logic of the project approach is to expand the institutional capacity , ease the regulatory gaps and demonstrate appropriate clean up remediation techniques," said Charles Cormier, World Bank Country Sector Coordinator for Social, Environment and Water Resources and project team leader. "With this in mind the project will establish all of the elements to enable the scaling up of efforts to identify and clean up orphan contaminated sites

The US$450.60 million loan for the Andhra Pradesh Water Sector Improvement Project, from the International Bank for Reconstruction and Development (IBRD), has a 30 year maturity which includes a 5-year grace period.

The US$38.94million credit for the Capacity Building for Industrial Pollution Management Project, from the International Development Association, the World Bank's concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.

The US$25.21 loan for Capacity Building for Industrial Pollution Management Project has a 30-year maturity including a 5-year grace period.

For more project information: http://www.worldbank.org.in/external/default/main?menuPK=295617&pagePK=141143&piPK=51055560&theSitePK=295584
For more information on the Bank's work in India: http://www.worldbank.org.in

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