Extra Loan for Bihar Highways Incorporates Climate Concerns

News Release | 20 September 2012

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will lend an extra $300 million to India to upgrade an additional 254 kilometers of state highways in Bihar, one of the poorest states in the country, while at the same time addressing some of the challenges of climate change.

"Building better roads to help more people get to jobs, schools, markets, and clinics more efficiently is critical to improving lives and livelihoods, but doing that in a way that doesn't harm the environment is also key," said Lee Ming Tai, Transport Specialist in ADB's South Asia Department.

The government will use the 25-year loan to upgrade sections of four highways, build and maintain bridges, and strengthen pavements. Improving road design will help address future flooding. To offset carbon emissions, the project will also plant 10 trees for every individual tree cut down to make space for the better roads. Construction sites will also use solar panels. Those living near the roads will also receive road safety training and women will be actively involved.

Per capita income in Bihar is less than 30% of the national average and 43% of the state's population live below the national poverty line. Nevertheless, the state's population is growing apace - up 25% in 2011 versus 2001 - putting increased pressure on the state's road network.

The total cost of the project - due to be completed by October 2017 - is $375 million, with the Government of Bihar providing the remainder of the funds. ADB will also provide a $1 million grant to help the state government prepare a 20-year master plan to develop and maintain its highways.

ADB's additional funding comes on top of a $300 million loan provided in September 2010 to rehabilitate 356 kilometers of state highways under the Bihar State Highways II Project. That project is due to be completely in 2015. ADB also provided $420 million in September 2008 under the Bihar State Highways Project to upgrade 820 kilometers of state highways and implement sector reforms, including the establishment of the Bihar State Road Development Corporation. That project finished in July 2012.