On the day its financial year was ending, Japan on Friday extended the largest ever soft loan package of yen 155,458 million (about Rs 5,910 crore) to India for 2005-2006 fiscal for various projects including the second phase of the Delhi Metro.
The Japanese financial year ends on Friday.
The exchange of notes to formalise the agreement was concluded in New Delhi on Friday morning by Japanese Ambassdor to India Yasukuni Enoki, and additional secretary in the Indian finance ministry Ashok Chawla.
Hidenao Yanagi, minister for economic affairs in the Japanese Embassy, said at a press conference that with the Yen loan going up this year by 15.6 per cent over the previous year's commitment, the Japanese assistance to India had 'attained new peak again.' For the last three consecutive years since the financial year 2003, India has been the top recipient of the Japanese soft loan assistance.
A spokesman for the Indian government said the loan would fund 10 projects in power generation, rural electrification, environment, forestry, water supply and sewerage, urban transport and port sectors.
The rate of interest would be 1.3 per cent per annum for the general projects, except the rural electrification project, and 0.75 per cent per annum for the environment sector projects.
The repayment period would be twenty years (after the grace period of ten years) for the general projects except the rural electrification project, and thirty years (after the grace period of ten years) for the environment and forestry sector projects.
For the rural electrification project, the rate of interest would be 0.75 per cent per annum and the repayment period will be ten years (after the grace period of five years).
"India and Japan have had a long and fruitful history of bilateral development cooperation since 1958. This is expected to be strengthened further and broad-based in future. Indo-Japan bilateral development cooperation has seen remarkable and progressive expansion in recent years," the spokesperson said.
Japan provided yen 134,466 million for projects in FY 2004. The total ODA loan commitment till FY 2005 has become yen 2,252.456 billion (equivalent to Rs 85,593 crore approximately).
At present, 38 projects are being implemented in India with Japanese loan assistance of Yen 546.568 billion (equivalent to Rs 20,770 crore approximately).
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