VIJAYAWADA: The State Water Resources department has accorded permission for the incorporation of a special purpose vehicle (SPV), proposed to be called Uttarandhra Irrigation Projects Development Corporation Ltd, for the funding, project management and to monitor the Babu Jagjeevan Ram Uttarandhra Sujala Sravanthi project.
While the project has been conceptualized to provide irrigation facilities to eight lakh acres and industrial and drinking water facilities to 1,037 villages covering a population of 30 lakhs in Visakhapatnam, Vizianagaram, and Srikakulam districts, the department has prioritized phase-1 and phase-2, including Tandava lift irrigation, for now.
According to the order (MS 58) issued by the special chief secretary (water resources) Adityanath Das on Wednesday, the total capital outlay of phase-1 and phase-2, including Tandava lift irrigation, is pegged at `8,400 crore, and the department plans to approach domestic and international funding agencies for the loan. Through the formation of an SPV, any financial difficulties/ constraints of the new projects cannot spill over on to any other government project and vice versa, the SPV can arrange financing through loans from financial institutions and even has the option to tap into public markets and shall enable efficient monitoring of projects progress in a transparent manner.
The SPV is considered a 70:30 debt-equity split for the total funding requirement based on the multiple communications with the financial institutions. However, the possibility of decreasing the equity share to either 20 percent or 10 percent will be explored. Although there are rivers like Vamsadhara, Nagavali, Champavathi, Janjhavathi, Tandava, Varaha, etc., in the north coastal region with sufficient inflows, and the rainfall is more than the state average, the water is not being fully utilized due to interstate issues. As a result, these rivers cater to only some areas in this region. Hence, there is a need to divert Godavari water to meet drinking, domestic, industrial, and irrigation requirements of this region, the officials said.
SPV can arrange funds
The SPV can arrange financing through loans from financial institutions and even has the option to tap into public markets and shall enable efficient monitoring of the progress of the projects.