New Delhi, March 31 (IANS): Japan signed a loan agreement with India Monday to provide 16,279 million yen (around Rs.960 crore) for the development of a water supply project in Agra, officials said.

The assistance from the Japan International Cooperation Agency (JICA) will be used for improvement of drinking water supply in the city of the Taj Mahal.

The agreement was signed here by Shinya Ejima, chief representative of JICA in India, and Rajesh Khullar, joint secretary in the union finance ministry.

This will be the second assistance by the JICA following a loan of 24,822 million yen (Rs.1,464 crore) for the project in 2007.

The loan will be at a rate of 1.4 percent and has a repayment period of 30 years with a grace period of 10 years.

The project will be executed by the Uttar Pradesh Jal Nigam and is expected to be completed by 2017.

"In Agra, drinking water supply has not kept up with the growing population. The quality of water is also very poor since the Yamuna river, the main source of water supply to Agra, is heavily polluted. This project aims to increase the supply of water with improved quality," said Ejima.