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Press Release

December 13, 2017

JICA's First Loan Project toward New Andhra Pradesh
- Increasing Agricultural Productivity Together with the Farmers -

New Delhi, December 13, 2017: Japan International Cooperation Agency (JICA) signed an agreement with the Government of India to provide Official Development Assistance (ODA) Loan of 21,297 million Japanese Yen (approximately INR 1,200 crores) to the Water Resources Department (WRD) and allied departments under the Government of Andhra Pradesh (GoAP), for "Andhra Pradesh Irrigation and Livelihood Improvement Project (Phase 2) (Tranche I)". The ODA loan's conditions for the Project are very concessional, i.e. 1.4% interest rate for project activities and 0.01% interest rate for consulting services, and 30 years of repayment period (including 10 years of grace period).

The agreement was signed between Mr. Takema Sakamoto, Chief Representative, JICA India Office and Mr. S. Selvakumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India in New Delhi.

Speaking on the occasion, Mr. Takema SAKAMOTO, Chief Representative, JICA India Office said, "JICA recognizes that the GoAP has assigned high priorities to transformation of agriculture sector in the state by increasing productivity, enhancing post-harvest management of processing and value addition of agricultural products. The Project adopts a farmer-oriented approach to support their livelihood, for example, the rehabilitation of irrigation systems under the Project can contribute to more effective cultivation in over 50,000 ha. Agriculture development, value chain development activities as well as livelihood development activities shall result in enhancement of farm productivity and increase of income of farmers and other rural communities in Andhra Pradesh."

In Andhra Pradesh, the gap between potential irrigated area and actual irrigated area is huge (over 1.1 million ha) due to a large number of aged irrigation systems and lack of proper systems. As cultivation needs to rely on rainfall, production and quality of crops in those command areas are not stable. The GoAP has put a strong emphasis on promoting Farmers Producers Organizations (FPOs) in order to enhance productivity and income as well as to reduce the burden of farming expenses, however, these are in early stages of development. Allied activities such as inland fisheries and animal husbandry are also important for the improvement of livelihood security of local communities especially those who belong to historically disadvantaged groups. Although Andhra Pradesh is one of the leading states in agriculture and horticulture production in India and has a strong potential to become an agribusiness hub in south India, there is further room to improve the overall food value chain, namely, enhancement of productivity, motivation of producers, awareness in quality, food safety and traceability, agribusiness infrastructure and private investment.

The Project is aimed at increasing the agricultural productivity, strengthening institutional and marketing capacities of farmers by rehabilitating existing irrigation systems, supporting integrated farming systems and strengthening value chain development, thereby contributing toward improvement of livelihoods of farmers and other rural communities in Andhra Pradesh. The Project focuses on rehabilitation of around 20 major and/or medium irrigation systems, and around 450 minor irrigation schemes across all districts of Andhra Pradesh. Moreover, the Project emphasizes on strengthening participatory irrigation management and supporting fishery and animal husbandry development in the state. It is also envisaged that around 20 FPOs shall be formed and supported under the Project. A unique feature of the Project pertains to pilot activities for food value chain development of selected cash crops such as mango, tomato, chilli and coconuts as well as establishment of Agriculture Mechanisation & Training Centre (AMTC) for promotion of farm mechanization.

JICA has previously committed approximately 407 billion Japanese Yen (approximately INR 23,000 crore) under JICA's ODA lending support for various projects in the state of Andhra Pradesh and Telangana. These projects include Andhra Pradesh Irrigation and Livelihood Improvement Project, Kurnool Cuddapah Canal Modernization Project, Andhra Pradesh Rural High Voltage Distribution System Project among others. The current Project, Andhra Pradesh Irrigation and Livelihood Improvement Project (Phase 2) shall be the first ODA loan project to be financed by JICA in Andhra Pradesh after the bifurcation of the state.

PhotoIrrigation system to be rehabilitated.

PhotoThe Project will enhance the capacities of water users' associations.

PhotoMr. Takema Sakamoto, Chief Representative, JICA India Office and Mr. S. Selvakumar, Joint Secretary , Department of Economic Affairs (DEA) at the Loan Agreement Signing Ceremony

About JICA

Established, by a specific law, as an independent administrative institution under the Government of Japan,the Japan International Cooperation Agency (JICA) aims to contribute to the promotion of international cooperation, as a sole Japanese governmental agency in charge of ODA implementation. JICA is the world's largest bilateral donor agency. JICA works as a bridge between Japan and emerging countries, and provides assistance in forms of loan, grant and technical cooperation so that the emerging countries can strengthen their capabilities.

For further information, please contact:

JICA India Office
Ai Tachikawa/Vini Sharma
+91 11 49097000


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