World Bank Loans Worth $1.8bn In Jeopardy

World Bank loans worth nearly $1.8 billion for various projects in India are in jeopardy as a result of the sanctions imposed by United States and supported by the G-8 group of nations.

Loan proposals worth $2.21 billion have been pending before the World Bank board out of which only two, totally $376.4 million, are likely to be cleared in the near future as they pertain to humanitarian assistance.

One of the two loans likely to be cleared is for a project concerning women and child development ($300 million) and the other is a for an Orissa State Health project ($376.4 million).

The World Bank board, at its meeting on June 25, will take up loan proposals amounting to about $1.2 billion for various projects in India. These include the women and child development project, Andhra Pradesh economic restructuring project ($550 million) and a Gujarat state roads project ($300 million).

Earlier, the World Bank board was slated to take a decision on loans for the Orissa state health project and another one for an Uttar Pradesh agriculture project ($130) million. However, the board deferred a decision.

Other loan proposals hanging before the World Bank board pertain to a Power Grid Corporation of India project ($450 million), a renewable energy project ($130 million) and a project for Haryana state highways ($275 million).

The foreign ministers of G-8 countries, at their meeting on June 12 in London, decided to block all multilateral non-humanitarian loans to India and Pakistan following the nuclear tests conducted by the two countries last month.

The G-8 countries have a combined voting strength of 45.35 per cent in the World Bank's governing board. A minimum of 50.10 per cent is required to get a loan proposal approved at the multilateral agency's governing board meetings.

The G-8 nations thus need to muster another 4.66 per cent to block loan approvals.

Among the G-8 nations, the US has a voting strength of 17.03 per cent, followed by Japan with 6.04 per cent, Germany with 4.67 per cent, the UK and France with 4.47 per cent each and Russia, Italy and Canada with 2.89 per cent each.