NEW DELHI, INDIA – The Asian Development Bank (ADB) and the Government of India today signed a $300 million loan agreement aimed at improving road connectivity and increasing domestic and regional trade along the North Bengal-Northeastern Region international trade corridor.
The loan is the first under a $500 million multitranche South Asian Subregional Economic Cooperation (SASEC) Road Connectivity Investment Program approved by ADB in 2014. The program will build about 500 km of roads in the North Bengal and Northeastern Region of India, helping to resolve the constraint of ‘last-mile’ connectivity between the in-country trunk road network and neighboring countries.
“Improvements in road connectivity in North Bengal and the Northeastern Region will enable efficient and safe transport within India and regionally with other SASEC member countries,” said M. Teresa Kho, Country Director of ADB’s India Resident Mission, who signed the loan agreement on behalf of ADB.
The program was endorsed by the SASEC trade facilitation and transport working group at a meeting in Singapore on 30 October 2013.
“The project area under the investment program is a key strategic thoroughfare integrating the regions of South and Southeast Asia, with the corridor connecting the countries of Bangladesh, Bhutan, Myanmar, and Nepal,” said Tarun Bajaj, Joint Secretary (Multilateral Institutions), Department of Economic Affairs at the Ministry of Finance, who signed for the Government of India. “It will pave the way for India and other South Asian countries to link to Myanmar, and further afield with the member countries of the Association of Southeast Asian Nations.”
The project documents meanwhile were signed by O. Nabakishore, Additional Chief Secretary (Works), for the Government of Manipur; A. D James, Deputy Secretary for the Ministry of Road Transport and Highways, Government of India; and Shaktibrata Basu, Chief Engineer, Public Works Department for the Government of West Bengal.
The tranche 1 project will build two national highways totaling about 150km in West Bengal, as well as state roads totaling about 180km in Manipur, extending to Myanmar. The project is expected to be completed by 31 December 2021.
ADB’s loan of $300 million makes up nearly 71% of the total project cost of almost $425 million, with the central and state governments providing counterpart finance of about $125 million. The loan has a 25-year term, including a five-year grace period with an annual interest rate determined in accordance with ADB's LIBOR-based lending facility.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members—48 from the region.