India signed a loan deal worth $76 million with Japan International Cooperation Agency (JICA)
The deal is to upgrade the environment management plan at Alang-Sosiya ship recycling yards
The deal is to upgrade the environment management plan at Alang-Sosiya ship recycling yards
Highlights of Deal
- It will help the Alang-Sosia ship-recycling yards to comply with international safety & environmental regulations.
- It will attract more business to the recycling facilities at Alang,
- It will consolidate India’s share in the global ship-recycling industry.
- This project will also help in safeguarding the marine and coastal environment.
- The use of advanced decontamination technology will rule out the possibility of fire accidents in oil and chemical tankers, thereby ensuring workers safety.
- It will increase in direct employment from 50,000 to 92,000 people and in-direct employment from 1.5 lakhs to 3 lakh people.
- The total cost of the project will be $ 111 million, out of which $76 million will be provided as soft loan from JICA.
- $25 million as taxes and fees will be borne by Government of Gujarat and the balance $10 million will be shared by Ministry of Shipping & Government of Gujarat.
- The project will be executed by Gujarat Maritime Board (GMB) and is likely to be completed by 2022.
What is Soft Loan?
- A soft loan is a loan with a below-market rate of interest.
- This is also known as soft financing. Sometimes soft loans provide other concessions to borrowers, such as long repayment periods or interest holidays.
- Soft loans are usually provided by governments to projects they think are worthwhile.
- The field of Natural Finance uses the term Soft Loan as an enforced ability-based repayment loan where the softness is not based on below market interest, but rather on terms that don't include fixed dates for repayment, but do mandate repayment when borrower is able to
