World Bank loan agreement for AP economic reform project

By Staff
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New Delhi, Feb 8 (UNI) The Union Government today signed an agreement with the World Bank for the 225 million dollar Third Andhra Pradesh Economic Reform Credit, which will enable the state government to swap high cost debt and undertake programmes relating to social sectors.

The agreement was signed in North Block between Mr Madhusudan Prasad, Joint Secretary, Ministry of Finance, Mr Rachid Benmessaoud, Operations Adviser, World Bank and Mr P Ramakant Reddy, Special Chief Secretary (Finance), Government of Andhra Pradesh.

The Third Andhra Pradesh Economic Reform Loan was approved by the World Bank on January 11, 2007. This entails an IBRD loan of 150 million dollars and an IDA credit of 75 million dollars.

The IBRD loan will be payable in 20 years, including a 5 year of grace period. The IDA credit will be on standard terms with 35 years maturity and 10 years grace period.

The loan will also provide incentive to the state government to pursue the reform programme in a focused manner in view of its structuring. At least 60 per cent of the proceeds of APERL-III would be used for swapping high cost debt.

APERL-III is the third loan under Andhra Pradesh Economic Reform Loan Programme being executed with World Bank assistance. The first loan under this programme was signed on March 15, 2002 for an amount of 250 million dollars.

The second loan was signed in December 2004 for an amount of 220 million dollars.

''Both these loans and credits have been utilised satisfactorily,'' a Finance Ministry statment said here.

UNI

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