Original disclosure @ ADB website
Updated in EWS May 19, 2023
Disclosed by Bank Apr 27, 2023
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According to ADB, the proposed project is the second tranche of the multitranche financing facility (MFF) for Visakhapatnam-Chennai Industrial Corridor Development Program (VCICDP). With the comprehensive support through upstream strategic studies and regular programmatic interventions, tranche 2 will unlock the state's manufacturing potential through fostering industrial agglomeration with holistic infrastructure support, investment promotion, and skills development. The project will also strengthen climate and disaster resilience and integrate industrial and urban planning for more competitive and livable cities.
With investment support through projects 1 and 2 of MFF, the VCICDP will develop two industrial clusters in the Visakhapatnam node (Rambilli and Nakkapalli) and two clusters in the Srikalahasti-Chittoor node (Naidupeta and Chittoor-South).The spine of the VCIC aligns with the Bay of Bengal Highway, which connects Cox's Bazar to Thoothukudi and is a priority corridor identified in South Asia Subregional Economic Cooperation program.
ADB approved on 26 September 2016 a loan of $245 million for project 1 under the first tranche of the MFF available up to 30 June 2023. It aims to (i) develop internal and external infrastructure of industrial clusters, (ii) strengthen electric power distribution capacity to meet industry demand, (iii) widen a section of a state highway to improve connectivity from the national highway to a port, and (iv) improve the water distribution network in Visakhapatnam for 24/7 supply. On 8 February 2023, the Government of India submitted a periodic financing request for $141.12 million in the second MFF tranche for project 2, to enhance VCIC infrastructure, with a focus on prioritized industrial nodes in Visakhapatnam and the Srikalahasti–Chittoor.The Government of India also requested the extension of the MFF availability period from 30 June 2025 to 19 September 2026 to provide sufficient implementation period for the second tranche.
The Department of Industries and Commerc (DOIC) of Government of Andhra Pradesh is the executing agency of project 2, and Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and Andhra Pradesh Road Development Corporation (APRDC) are the implementing agencies.
Land Acquisition and Involuntary Resettlement Impacts of the various subprojects:
1. Start Up Area of Rambili Industrial Cluster
2. Start Up Area of Chittoor- South Industrial Cluster
3. Road for External Connectivity to Naidupeta Industrial Cluster Road Subproject
4.Road For External Connectivity to Nakkapali Industrial Cluster Road
5. Start-Up Area of Nakkapalli Industrial Cluster
6. Road for External Connectivity to Rothusurumala Cluster
7. Widening of Anakapalli to Atchuthapuram Road
The Government of India submitted a request for a loan of $141.12 million from ADB’s ordinary capital resources to help finance the project. The loan will have a 26-year term, including a grace period of 5 years, an annual interest rate determined in accordance with the ADB’s Flexible Loan Product, a commitment charge of 0.15% per year; and such other terms and conditions set forth in the loan and project agreements. Based on the straight-line method, the average maturity is 15.75 years, and the maturity premium payable to ADB is 0.10% per year.
The loan from ADB will finance: (i) civil works, (ii) consulting services and skill development, and (iii) the part of incremental administrative costs. The GoAP will contribute $73.68 million equivalent to cover: (i) taxes and duties, (ii) land acquisition and resettlement, (iii) part of incremental administrative costs, (iv) contingencies, and (v) financing charges.
Climate adaptation is estimated to cost $51.77 million, of which ADB will finance $44.17 million (85%) and the government $7.60 million (15%). Climate mitigation is estimated to cost $0.34 million, of which ADB will finance $0.29 million (85%) and the government $0.05 million (15%).
|Responsible ADB Officer||Matsunaga, Akira|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Urban Development and Water Division, SARD|
|Executing Agencies||Department of Industries & Commerce, Government of Andhra Pradesh|
ACCESS TO INFORMATION
You can submit an information request for project information at: https://www.adb.org/forms/request-information-form
ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals
ACCOUNTABILITY MECHANISM OF ADB
The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.