We are interested in expanding the list of areas where our financing is currently available (in India). The agency has funded and provided consultancy for numerous road, power and airport projects in Philippines, Indonesia, Kenya and Thailand. If the Indian government includes specific projects in these areas among those that could receive ODA, we would be keen to finance them," JICAs chief representative in India, Shinya Ejima, told FE.
He clarified that JICA assitance won't be available to public-private partnership projects, but only for government/PSU projects. JICA is also willing to fund and advise the government in modernising airports in smaller cities.
The Japanese agency is looking at an annual overseas development assistance outlay of $3.5 billion for India in the current fiscal.
So far, JICA has largely focused on funding urban mass transit systems, railway, sanitation, drinking water, forest conservation and poverty alleviation, health and education projects in India. Its exposure to other infrastructure has been limited.
JICA had financed some hydro projects in the Northeast a decade ago but has since then done no project financing in the power generation sector.
JICA funding would give these infrastructure projects access to untied loans with a low interest rate of 1.4% and a repayment period of 30 years, extendable by 10 years. It will also give access to tied loans under special terms for economic partnership (STEP) bearing a rate of 0.1% with a 40-year repayment period. These are attractive for Indian companies as the best rate that even a highly-rated firm can now get from the domestic banks is between 9-10% with a repayment period of just about seven years, although with the option to extend the repayment period to 20 years through the takeout financing route. JICA can fund up to 85% of a project cost.
The agency is involved in upgrading of a distribution system in Haryana and two highway projects in Bihar. JICA is willing to fund the setting up of generation stations by NTPC or any other state utility using environment-friendly supercritical technology.
It is also willing to fund the replacement and retrofitting of NTPC's thermal power plants.
These (JICA funds) would be great opportunity for super-critical projects as it will help us in keeping electricity tariffs low, said an NTPC official.
In 2013-14, India spent $ 1.3 billion of ODA assistance from JICA. In 2011-12 and 2012-13, JICA committed $ 2.67 billion and $ 3.49 billion, respectively, to India.