ADB to extend loan for two projects in India

New Delhi: The Asian Development Bank (ADB) will extend loans amounting to about $600 million towards two projects as part of its efforts to support economic expansion and poverty alleviation in India.

While loan assistance of $420 million will be extended to Bihar to upgrade and expand the State highway network, the Manila-based development bank has also approved a $188.2 million multi-tranche lending facility to help modernise the irrigation infrastructure and management systems in Orissa.

The ADB loan of $188.2 will provide bulk of the $268.8 million funding needed to get the programme underway. The balance will be covered by the Orissa Government, which will provide $73.4 million and the beneficiaries who will contribute $7.2 million in cash or in kind. The loan will be made available in four tranches over a period of eight years. It’s first tranche amounting to $47.2 million will be provided upon signing of the agreement.

Meanwhile, Bihar will improve about 820 km of roads under the State Government’s highway development programme. A $1 million technical assistance is also granted for reform and strengthening of road sector institutions. The Centre will provide the remaining $48 million for the project. The $420-million loan is a 25-year loan and will run for four years with expected completion of January 2012.

“The project (Highways Project) is a core investment of the State Government to transform the State dependent on subsistence farming to a state built on market-oriented agriculture and tourism and to attract private sector investment,” said Mr Hiroaki Yamaguchi, a senior Transport Specialist with ADB’s South Asia Department.