ADB, India Sign $220 Million Loan for Improving Road Connectivity and Efficiency in Rajasthan
NEW DELHI, INDIA (3 July 2017) — The Asian Development Bank and the Government of India today signed a $220 million loan for improving connectivity as well as transport efficiency and safety on state highways of Rajasthan.
The loan is the first tranche of the $500 million Rajasthan State Highway Investment Program, approved by ADB Board in May this year, that will upgrade about 2,000 kilometers of state highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements.
The signatories to the loan agreement were Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs in the Ministry of Finance, who signed on behalf of the Government of India, and Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, who signed for ADB. The project agreement was signed by S. L. Sharma, Chief Engineer and Additional Secretary, Public Works Department, the Government of Rajasthan.
“The investment program will help improve state highways and major district roads as well as enhance the capacity of the state public works department for road asset management road safety and project management in Rajasthan,” said Mr. Kumar.
“One of the focus areas of the program is to attract private sector financing through government capacity building on public private partnership (PPP) development. ADB will finance part of the construction costs for the annuity-based PPP concessions and engineering procurement construction (EPC) contracts, enhance the stability of contract regime, and ensure good governance during project implementation,” said Mr. Yokoyama after signing the loan.
The first tranche loan will improve about 1,000 kilometers of state highways and major district roads. It will have a 25-year term, including a grace period of 8 years, and carry an annual interest rate determined in accordance with ADB’s London interbank offered rate-based (LIBOR) lending facility. The total cost of the project is $1.415 billion, with the government contributing $465 million and $450 million coming from the private sector and other concessionaries.
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, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.