A tripartite agreement was signed among German banking group KfW, the Odisha Government and the Centre on Thursday. The KfW will extend loan as well as assistance worth a whopping 52.5 million Euro for the urban infrastructure sector of the State.
The pacts are aimed at boosting urban services delivery in the State. On the day, at least four MoUs were signed by the three parties. Loan and financial agreements were signed between KfW and Government of India while a project agreement was inked with the State Government. The fourth MoU was between the State Government and Odisha Urban Infrastructure Development Fund (OUIDF) for which the assistance is meant.
“By virtue of the present loan agreement with KfW, we shall be able to support the Urban Local Bodies (ULBs) in the implementation of viable urban infrastructure projects in priority sectors,” Chief Minister Naveen Patnaik, who was present at the signing of the pacts, said. The State, he said, will be able to augment the fund by attracting more assistance from KfW as well as other bilateral and multilateral agencies.
Naveen said Odisha is among the leading states in India in carrying out urban sector reforms and it is now in the process of enacting a legislation for granting property rights to slum-dwellers.
Under the MoUs, KfW will extend a loan assistance of 50 million euro besides a technical assistance grant of 2.5 million Euro. The Odisha Government, on its part, will also contribute 5 million Euro to the seed capital of the fund whereas another 0.5 million euros towards the technical assistance grant.
The tenure of the loan __ which will carry an interest rate of 1.875 per cent per year __ will be 15 years, including the moratorium of five years. While the Government of India will pass on the loan to the State on a back-to-back basis, the State will pass it on to the OUIDF in a 50:50 ratio of loan and grant. The loan shall be drawn in four years starting this fiscal.
The funds will be used for water supply, sewerage, solid waste management, drainage and slum development. The OUIDF Trust will be headed by Chief Secretary of the State while the Secretary of Housing and Urban Development Department will head the project executing agency. An asset management company will be attached to the Trust for technical assistance.
The MoUs were signed by Prabodh Saxena of Government of India, Finance Secretary JK Mohapatra, Housing and Urban Development Department Secretary Injeti Srinivas and KfW Director Ostra Von Maltzam. Chief Secretary BK Patnaik and Consul General of Federal Republic of Germany at Kolkata Rainer Schmiedchen were present.
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