New Delhi: The government today approved setting up of three projects, including a solar power unit under the Delhi-Mumbai Industrial Corridor, worth Rs 2,558.6 crore, a move which would boost manufacturing sector in the country.
The cabinet committee on economic affairs also approved the special loan facility to be provided by Japan International Cooperation Agency (JICA) for development of DMIC project.
Further, the projects cleared by the CCEA include formation of a SPV for implementation and operation of model solar power project at Neemrana as a 100 per cent subsidiary of Delhi Mumbai Industrial Corridor Development Corporation and approval for development of trunk infrastructure for integrated industrial township at Greater Noida.
The other projects is the development of trunk infrastructure for the township in Ujjain.
"The CCEA has approved the utilisation of Japanese assistance under the JICA through Special Terms for Economic Partnership (STEP) of Japanese official development assistance loans for the DMIC project and the operational rules, terms and conditions of this tied loan facility," an official statement said.
Japan has committed to invest $4.5 billion in the government ambitious $90 billion DMIC project.
The project is aimed at creating mega industrial infrastructure along the Delhi-Mumbai Rail Freight Corridor, which is under implementation. Japan is giving financial and technical aid for the project, which is developed on either side of a 1,483-km stretch running across seven states.
"The proposal for availing $4.5 billion facility through a STEP loan is expected to bring in Japanese funding, cutting edge technology and knowhow into projects implemented in DMIC. This would also enable the Japanese companies to establish their manufacturing facilities in India and enable transfer of technology from Japan to India," it said.
The assistance from JICA under the STEP loan facility will be required particularly for trunk infrastructure projects and transport connectivity projects which may not be commercially viable in their initial stages.
It also said the official development assistance loan under the STEP scheme is available at an interest rate of 0.1 percent for a repayment period of 40 years covering up to 100 percent of the project cost. The scheme also provides for a moratorium of 10 years.
The development of trunk infrastructure for the township in Ujjain and Greater Noida will require estimated investment of Rs 808.60 crore for stage 1 of the project and Rs 1,714.70 crore, respectively.
"The CCEA approved the formation of a Special Purpose Vehicle for implementation and operation of the model solar power project at Neemrana as a 100 percent subsidiary of the DMIC Development Corporation.
"The total financial implications for the government is around Rs 35.34 crore, out of which the equity component is Rs 13 crore and the debt component is Rs 22.34 crore," it said.
The statement said JICA will conduct consultation with Japanese companies for a project to be financed by a STEP loan to promote more appropriate formulation and prompt implementation of the project as well as to promote more active participation of Japanese firms.
Further, it said the solar power project demonstrates the integration of solar power with industrial diesel generator sets (as the backup facility).
The project has the latest cutting edge technological breakthroughs in the field of solar generation and smart grid from Japan and is expected to yield the following benefits such as production of green power while reducing carbon emissions by cutting down diesel consumption.
It would promote manufacturing of solar panels and other equipment facilities.
"The SPV for the implementation and operation of the solar power project will be a 100 per cent subsidiary of DMICDC... The power generated through the 5MWp component would be sold to NTPC Vidyut Vyapar Nigam Ltd at a tariff of Rs 8.77 per unit," it added.
On the development of trunk infrastructure for integrated industrial township at Greater Noida, it said that it is expected to attract private sector investments of over Rs 33,000 crore over a period of 30 years, generate significant employment.
"The CCEA has approved the formation of a JV company, with equity contribution of 50 per cent each from the DMIC Trust and the government of Uttar Pradesh...The project cost of Rs 1,714.70 crore is proposed to be met by equity contribution of Rs 617.20 crore by the DMIC Trust and the state government," it said.
It said the equity from the state would be in the form of land which would be transferred to the JVC. The capital expenditure of Rs 480.30 crore will be met from internal accruals, it added.
"The project is proposed to be implemented in two stages. In the first stage, the JVC formed by DMIC Trust and UP government will ensure the creation of trunk infrastructure for the overall infrastructural industrial township development.In the second stage, private players will be invited for the phased development of the township," it said.
About the Ujjain project, it said the government has also approved investment of Rs 59.50 crore as 50 percent equity contribution of DMIC Trust to the joint venture company (JVC) and further investment of Rs 372.80 crore as debt with a 10 year moratorium from the start of the project and 12 year repayment at an annual interest of 8.5 percent.
It said the remaining 50 percent of the equity will be met by the state government.
"The development of infrastructure industrial township is expected to attract private sector investments of around Rs 13,000 crore," it added.
In the first stage, the JVC would take up creation of trunk infrastructure for the development of the township and in the second stage, it will invite private developers to develop, operate and maintain real estates.
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Updated Date: Dec 21, 2014 02:57:35 IST