Bank halts $437-mn NJPC loan
NEW DELHI, DECEMBER 18: The World Bank has decided to
terminate the $437 million loan to the state-owned Nathpa
Jhakri Hydro-Electric Power Corporation (NJPC) midway thereby
putting a questionmark on the future of the 1,500 MW hydel
project being executed by the company in Himachal Pradesh.
Top government officials said that in a recent letter to the
ministries of finance and power, the World Bank’s Country
Director, Edwin R Lim has announced the Bank’s decision to
pull out of the project.
as three units of this project are due to commission in 2003,
the World Bank has refused to consider any further extension
of its loan, which is due to close in March 2002. The Bank
has in fact asked NJPC and the centre to secure alternative
funding for competition of this mega project”, officials said.
Official sources said that nearly $100 million is yet to be
disbursed from the World Bank loan funds, for which NJPC will
now have to look for alternate sources of funds.
It is significant to note here that the World Bank has already
extended this loan once for four and a half years from its
earlier closing date of December 1997. This loan was given
12 years back and is oldest in the World Bank portfolio of
On being contacted, chairman and managing director, National
Hydro-electric Power Corporation (NHPC), Yogendra Prasad,
who was given additional charge of CMD, NJPC few months back,
said, “I do not share the view that suspension of the World
Bank loan will in anyway jeopardise the progress of the project.
As far as alternative sources of funds is concerned, I have
already tied up the balance $100 million with Power Finance
Corporation (PFC) which has agreed in principle to extend
the balance funds requirement for the project”.
Interestingly, World Bank’s decision to discontinue this loan
comes close on heels of the recommendations made by the Bank’s
own progress review mission, in its aide memoir, where it
has been recorded that good progress has been achieved in
the construction of the project during the last three months
and that the first two units will be commissioned at the end
of 2002, which is 12 months in advance of the date envisaged
in April 2001.
Showing its confidence on the progress achieved by NJPC in
the past three months, World Bank has, in fact, improved the
project rating from ‘marginally satisfactory’ in May earlier
this year to ‘fully satisfactory’ during the last month.
NJPC is a 75:25 joint venture of the Union Government and
Himachal Pradesh respectively.