In Delhi: Sona Thakur, 91-11-24617241
In Washington: Michael Jones, (202) - 473 2588
WASHINGTON, September 13, 2007 – The World Bank today approved a US$400 million loan to the public sector power company, Satluj Jal Vidyut Nigam Limited (SJVN), for developing a run-of-river hydropower plant on the river Satluj that will provide renewable, low carbon energy to India’s over-stretched Northern Electricity Grid.
The 412 MegaWatt (MW) Rampur Hydropower Project in the state of Himachal Pradesh supports the Government of India’s plan to develop hydropower to help meet the country’s energy needs and thus provide all its citizens with access to electricity.
Over 40 percent of India’s inhabitants ─ most living in the rural areas ─ do not have access to electricity today. In addition, one-third of Indian businesses cite expensive and unreliable power as one of their main business constraints.
“Low access to power is not just an economic constraint but also works to keep the poor from improving their lives,” said Ms. Isabel Guerrero, World Bank Country Director for India. “It prevents farmers from running irrigation pumps to water their fields; it prevents children from studying at night; it forces small businesses to invest in expensive generators for running their shops and; puts the health of millions at risk when it prevents the sterilization of basic health instruments in hospitals and dispensaries.”
The Rampur Project will produce electricity sufficient to electrify a million additional households. It is expected to generate about 1,770 million units of electricity each year, which will feed into the Indian electricity grid and help bring power to homes, farms and factories that are currently unserved or inadequately served. The plant will also supply the grid with 412 MW of assured supply during the five-and-a-half hours that the system experiences a peak surge in demand each day due to high-density household demand.
The project at Rampur requires no dam or reservoir to be built and so will not involve any inundation of land; nor will the scheme extract any additional water from the river, as it will reuse the water used by the existing upstream Nathpa Jhakri power plant. The social and environmental impacts on local communities are thus low compared to other plants of this size.
“Our continued association with the World Bank has helped SJVN institutionalize sensitive and sustainable systems of environment management and benefit-sharing,” said Mr. H. K. Sharma, chairman and managing director of SJVN, a company the Bank has also been associated with the in the development of the Nathpa Jhakri project. “We have set up systems to ensure that project-affected families, as well as the local communities, acquire a continuing stake in the development initiated by the Rampur project.”
In keeping with the World Bank’s safeguard policies and SJVN’s corporate philosophies, effort has been made not just to mitigate any social and environmental impacts of the Rampur Project but to also look for opportunities to improve the lives of people in the project’s vicinity. Innovative benefit-sharing measures have been launched, including the setting up of a fund for building community infrastructure in project-affected villages, and education support and healthcare for the local people.
The host state of Himachal Pradesh also stands to benefit from the project. It will receive 12 percent of the total electricity generated by the Rampur plant as annual royalty (monetized to around U$12 million per year). In addition, a significant share of additional power will also be available to the state.
“The project will also have significant environmental benefits,” said the co-leaders of the Bank’s project team, Sunil Kumar Khosla, Senior Energy Specialist and Judith Plummer, Senior Financial Analyst. “Currently, India’s coal-based power sector accounts for about 50 percent the country’s carbon emissions. Hydropower projects like the Rampur plant have the advantage of producing power without adding to the emissions burden of India.”
SJVN is a joint venture between the Government of Himachal Pradesh and the Government of India. The Government of India will stand guarantor to the loan.
The loan is provided by the International Bank for Reconstruction and Development (IBRD), and has 20 years to maturity including a 5-year grace period.
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For more information about the World Bank’s work in India, visit http://www.worldbank.org/in
For more information about hydropower in India, visit http://www.worldbank.org/indiahydro