To avail the near-$34 billion worth of loans promised by Japan, India has begun working out a list of railway and multi-modal transport projects that can be financed through these funds.
The finance ministry along with the ministries of urban development and railways are understood to be looking into the issue to identify projects in these sectors.
“Officials have been asked to work out a potential list of projects that can be taken to the Japanese side for funding sectors of multi-modal transport as well as railways,” said a source close to the development.
Japan’s Prime Minister Shinzo Abe had in September committed $33.8 billion to India over the next five years through overseas development assistance (ODA) for developmental projects in infrastructure and construction of smart cities.
The aid at an average $7 billion annually, which is amongst the largest from any country to India, was one of the key takeaways from Prime Minister Narendra Modi’s five-day visit to Japan.
The loans will be disbursed based on the projects brought forward by the Indian government. “The exercise will help us identify projects across the country that can be taken up with the Japanese for aid,” said the source.
As part of the exercise, proposals for construction of metro rail systems and other urban mass transit systems are being looked at.
Meanwhile, the government is also looking at projects where loans under Special Terms of Economic Partnership (STEP) can be taken from Japan. STEP loans are those which are extended to projects along with Japanese technology and expertise, based on request from the recipient country.
India is now the largest recipient of ODA from Japan that has been extending bilateral loans since 1958.
Currently, over 67 projects with a sanctioned loan amount of Rs 86,555 crore are being implemented.