Project Signing: World Bank supports India's environment agenda with two loans

July 22, 2010

NEW DELHI, 22 July 2010:  Loan and Credit Agreements worth $286.15 million were signed today between the Government of India and the World Bank for two projects aimed at supporting India’s agenda of integrating environmental and ecological safeguards into its growth strategy.

Mr. Jairam Ramesh, Minister of State (Independent Charge) for Environment and Forests, attended the signing of the Agreements for the $64.15 million Capacity Building for Industrial Pollution Management Project and the $222 million Integrated Coastal Zone Management Project.  Dr. Anup Pujari, Joint Secretary of the Department of Economic Affairs in the Ministry of Finance, signed the Agreements on behalf of the Government of India, and Mr. Roberto Zagha, Country Director for India, on behalf of the World Bank.

“The  Government of India has increased its focus on environmental management, which will go a long way to ensure that India's high growth is environmentally sustainable, both domestically and globally,” said Mr. Roberto Zagha, World Bank Country Director for India“These projects will support this important agenda of the government, by helping build capacity and institutions in two diverse but equally crucial areas – the management of India’s coastal areas and the handling of industrially polluted sites,” said Mr. Zagha.

Capacity Building for Industrial Pollution Management Project:  This Project will help pilot the Government of India’s national program to rehabilitate contaminated industrial sites located across the country. The government estimates that there are about 36,000 industries in the country which generate about 6.2 million tons of hazardous waste annually.  At a number of locations, significant quantities of industrial sludge and effluents laden with heavy metals and other toxic contaminants are dumped in open areas, in rivers, around residential habitations and on farm land.  Such practices have resulted in a number of sites where soil and groundwater are significantly contaminated and affect the health of local communities.

The Project aims to support the establishment of a National Program for Rehabilitation of Polluted Sites (NPRPS) to address orphan contaminated sites and municipal dump sites that were poorly managed.  The Project will also build capacity in the states of West Bengal and Andhra Pradesh for undertaking environmentally-sound remediation of pilot polluted sites.

“The implicit logic of the project approach is to improve the institutional capacity, expand on the national inventory of polluted sites and demonstrate appropriate clean-up techniques,” said Mr. Charles Cormier, World Bank Country Sector Coordinator for Social, Environment and Water Resources and Project team leader.

The other signatories to this Agreement included Mr. B.S.S. Prasad, Special Secretary (Environment), Environment, Forests and Technology Department, Government of Andhra Pradesh and Mr. Sandipan Mukherjee, Member Secretary, West Bengal Pollution Control Board, Government of West Bengal.

The Integrated Coastal Zone Management Project (ICZMP):  India’s unique coastal and marine ecological resources continue to be under stress from rapid urban-industrialization and from increasing coastal hazards, jeopardizing the well-being of some 63 million people living in the low-elevation coastal areas. The Government of India has initiated a national program to promote participatory, integrated but decentralized process of planning and management of coastal areas to protect and conserve natural resources and to secure livelihoods in coastal communities.

The Project will help build the appropriate institutional arrangements, capacity and advanced knowledge systems needed to implement the national program.  It will also help pilot this approach in three coastal states, Gujarat, Orissa and West Bengal, through a range of complementary local pilot investments in select coastal stretches to support state-level capacity building.  These investments include interventions such as mangrove plantation, regeneration of coral reefs, cleaning up of beaches, sewerage and solid waste management, conservation of cultural heritage, and a number of activities aimed at enhancing the livelihoods of coastal communities.

“Among the initiatives the Project will support are the mapping and delineation of hazard lines and ecologically sensitive areas; the setting up a world-class national centre for sustainable coastal zone management; and the preparation of integrated coastal zone management plans,” says Mr. Tapas Paul, World Bank Senior Environment Specialist and Project team leader.

World Bank support for the Capacity Building for Industrial Pollution Management Project comes as a combined loan and credit.  The US$38.94 million credit from the International Development Association (IDA), the Bank’s concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years. The US$25.21 loan has a 30-year maturity including a 5-year grace period.  The IDA credit for the Integrated Coastal Zone Management Project is also on the same terms -- a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.

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