By Accommodation Time News Services
The Cabinet Committee on Economic Affairs has approved the utilisation of Japanese assistance under the Japan International Cooperation Agency (JICA) through Special Terms for Economic Partnership (STEP) of Japanese official development assistance loans for the Delhi Mumbai Industrial Corridor (DMIC) project and the operational rules, terms and conditions of this tied loan facility.
The Government of India is developing the Delhi Mumbai Industrial Corridor (DMIC) Project as a global manufacturing and investment destination by utilizing a high capacity 1483 Km long western dedicated Freight Corridor as the backbone. The development of industrial cities with world class infrastructure in the DMIC region will attract an estimated investment of around US $ 90-100 billion, while providing employment opportunities for over three million people. The proposal for availing the US $ 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.
The ODA 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. Based on a cost comparison communicated by DMICDC, the ODA loan under the STEP scheme provides for substantial savings, in comparison to other standard ODA loans with interest rates ranging from 0.8 percent to 1.4 percent for a repayment period of 15 to 30 years.