The government of Japan has said that it will provide loan for an amount of ¥39,555 million (approximately Rs1,345 crore) to India as its official development assistance (ODA) for FY 2007 in the form of a loan package under the 'first batch of double track'.

Japan recently introduced a 'double track' mechanism for providing ODA loan to India in two batches. The loan would fund two projects in power transmission, water supply and sewerage. An exchange of notes on this package took place in New Delhi today between Kumar Sanjay Krishna, joint secretary, ministry of finance and Yasukuni Enoki, ambassador of Japan to India.

Japan had provided ¥184,893 million (approximately Rs6,916 crore) for projects in FY 2006 as part of its ODA package. The total ODA loan commitment including this batch of loan has become ¥2476.985 billion (approximately Rs93,967 crore). At present, 54 projects are being implemented in India with a Japanese loan assistance of ¥839.042 billion (approximately Rs28527 crores).

The two selected projects for Japan's ODA in 2007 are Goa's water supply and sewerage project and a power transmission system in Maharashtra.

The rate of interest for the Goa water supply and sewerage project would be 1.3 per cent per annum while the power project in Maharashtra would attract an rate of interest would be 0.75 per cent per annum for its power transmission system project.

The repayment period, including a grace period of 10 years, would be 30 years for the Goa project and 15 years for Maharashtra's power project, including a five-year grace period.

India and Japan have had a long history of bilateral development cooperation since 1958, which the two companies hope to strengthen and broad-based in the future. The bilateral cooperation between the two countries has seen remarkable and progressive expansion in recent years.