India : Tamil Nadu Urban Flagship Investment Program

Sovereign Project | 49107-003

The program will develop priority water supply, sewerage, and drainage infrastructure in at least 10 cities located within strategic industrial corridors of Tamil Nadu. It will support innovative pilots, including India's first solar-powered sewage treatment plant (STP) to offset greenhouse gas emissions and enhance operational efficiency; strengthen urban governance; and build capacity of state and local institutions to enhance urban service delivery, environmental sustainability, and climate resilience.

Project Name
Tamil Nadu Urban Flagship Investment Program
Project Number
Country / Economy
  • India
Project Status
Project Type / Modality of Assistance
  • Grant
  • Loan
Source of Funding / Amount
Grant: Solar Powered Sewage Treatment Plant in Coimbatore, India
Source Amount
Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility US$ 2.00 million
MFF Facility Concept 0105-IND: Tamil Nadu Urban Flagship Investment Program
Source Amount
Ordinary capital resources US$ 500.00 million
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
  • Knowledge solutions
  • Partnerships
Sector / Subsector
  • Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban sewerage - Urban water supply

Effective gender mainstreaming
The program will develop priority water supply, sewerage, and drainage infrastructure in at least 10 cities located within strategic industrial corridors of Tamil Nadu. It will support innovative pilots, including India's first solar-powered sewage treatment plant (STP) to offset greenhouse gas emissions and enhance operational efficiency; strengthen urban governance; and build capacity of state and local institutions to enhance urban service delivery, environmental sustainability, and climate resilience.
Project Rationale and Linkage to Country/Regional Strategy

Tamil Nadu ranks first in urbanization amongst large states in India (48.5% of its population lives in cities, which is projected to increase to 67% in 2030) and is the second largest contributor to the country's gross domestic product. Despite being a leader in many areas of manufacturing and information technology enabled services, managing rapid urbanization will be vital to sustaining its economic growth, alleviating poverty, and maintaining urban livability. Key challenges include: (i) acute infrastructure deficits with increasing demands from rapid urbanization; (ii) expanding slum populations; (iii) pollution of waterways; (iv) weak institutional capacity to plan and implement projects; and (v) mixed performance in key governance indicators, including local revenue generation, financial management, and municipal administration. Water related disasters such as recurring droughts (once in every 2.5 years) and catastrophic urban floods linked to climate change are aggravated by high water losses in older distribution networks and inadequate drainage systems not adapted to heavier monsoon rains. Addressing these complex challenges requires significant investments and deeper institutional support.

In Tamil Nadu, urban service levels remain low. As of 2017: (i) 48% of households are served by piped water; (ii) 80% of cities receive less than 80 liters of water per capita per day versus the national standard of 135 liters per capita per day; (iii) nonrevenue water (NRW) is 30%50%; (iv) 42% of households are covered by a sewerage network; (v) wastewater treatment capacity is 43% of sewage generation; and (vi) urban drainage coverage is 50%. Low service levels are primarily the result of inadequate local finances to invest in capital expenditures and a shortage of trained staff. The program will directly support improvement in these areas.

To address the challenges of rapid urbanization, the state aims to (i) provide universal access to water and sanitation, (ii) develop 'world-class cities, (iii) establish high-performing industrial corridors, and (iv) promote climate-resilient urban development. Tamil Nadu's strategic documents outline programs that support capacity building; enable access to infrastructure development funds; and employ green technologies, such as solar power, to achieve sector goals. Vision Tamil Nadu 2023 estimated an urban investment requirement of $42.7 billion, including $7.5 billion for water supply and sanitation, prioritizing continuous and full coverage of services. The State Annual Action Plan, 20172020 identified 136 projects in 27 cities covering water supply, sewerage, and drainage infrastructure.

The Municipal Administration and Water Supply Department (MAWS) is the focal state-level department for urban development in Tamil Nadu and established the Commissionerate of Municipal Administration (CMA) to (i) support urban local bodies (ULBs) (municipalities) plan infrastructure to meet national service-level standards, and (ii) advance urban reforms set forth by India's 74th Constitutional Amendment Act, 1992 focusing on the devolution of services delivery and revenue generation functions to ULBs. While Tamil Nadu performed well in past national reforms programs, the state wishes to improve the financial and governance performance of ULBs. To achieve this, the state recognizes the need to strengthen the CMA's capacity to fulfill its mandate to support ULBs and monitor urban reforms, particularly in the areas of revenue generation, financial management, operation and maintenance (O&M), and the introduction of innovative approaches in the sector.

To help finance the large-scale investments in Tamil Nadu, the state will take advantage of funds from the three national flagship programs under the Ministry of Housing and Urban Affairs: (i) the Swachh Bharat (Clean India) Mission for Urban Areas, (ii) the Atal Mission for Rejuvenation and Urban Transformation, and (iii) the Smart Cities Mission. The three programs are complementary, and each highlights the need to strengthen urban institutions and governance. Nevertheless, these funding sources are not sufficient for the large funding requirements of Tamil Nadu, and the state requested help from ADB to finance water supply, sewage and drainage infrastructure in at least 10 cities within strategic industrial corridors, as well as programs to develop institutional capacity, public awareness, and urban governance.


(i) Universal access to basic water and sanitation services achieved (Tamil Nadu Vision 2023); (ii) "World-class" cities and industrial corridors across the state developed (Tamil Nadu Vision 2023); and (iii) Water security, reduced vulnerability to climate change in urban areas, and enhanced share of renewable energy achieved (Tamil Nadu Sustainable Water Security Mission, State Action Plan on Climate Change)

Project Outcome

Description of Outcome

Livability and climate resilience in at least 10 cities in priority industrial corridors enhanced.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Climate-resilient sewage collection and treatment, and drainage systems developed in at least eight cities

Water supply systems in at least five cities improved with smart features

Institutional capacity, public awareness, and urban governance strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Ambur, Chennai, Coimbatore, Cuddalore, Rajapalaiyam, Thoothukkudi, Tiruchchirappalli, Tirunelveli, Tiruppur, Vellore

Summary of Environmental and Social Aspects

Environmental Aspects
Initial environmental examinations (IEEs) were prepared for all Tranche 1 subprojects and show no significant environmental impacts. Anticipated impacts are temporary and will be adequately avoided/minimized through proven mitigation measures and sound engineering-construction practices outlined in environmental management plans.
Involuntary Resettlement
Resettlement Plans were prepared for all subprojects to fully assess and adequately address the following impacts: (i) potential temporary loss of income for street vendors on proposed pipe alignments, and (ii) permanent impacts in the Vellore sewerage subproject including 100% structure loss leading to relocation of 90 vulnerable affected persons (22 households). No private land acquisition is anticipated in Tranche 1.
Indigenous Peoples
There are no indigenous people communities present at or around the subproject sites.

Stakeholder Communication, Participation, and Consultation

During Project Design
The design features include pro-poor, socially inclusive and gender responsive elements. All project ULBs endorse pro poor connection and tariff policies, though the same may vary from one ULB to the other. The project provides for individual house service connection (HSC) as part of financing. Community participation is envisaged through information, education and communication (IEC) campaigns focusing on educating the poor and disadvantaged populations about project benefits. Capacities of community members, with special focus on women, will be strengthened in solid waste management, water conservation and other aspects related to health, sanitation and women's safety. Water and sanitation committees will be constituted in slums with equal representation of female members. Project staff will be sensitized on socially inclusive and gender responsive urban governance and management.
During Project Implementation
A community awareness and participation plan (CAPP) was developed to ensure an inclusive and participatory approach to project planning, implementation and monitoring. The activities, key messages and methodology was planned with the objective to actively and effectively involve key stakeholders. Stakeholder mapping and baseline socio economic survey was carried out to be able to identify various stakeholders and plan relevant information and communication strategies. Outreach activities involving school students, community groups and self-help groups (SHGs), etc. are also part of the CAPP activity.

Business Opportunities

Consulting Services

All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). There will be one Construction Management and Supervision Consultant (CMSC) for each implementing agency (except for municipalities to be assisted by TWAD) to assist it in all aspects of the TNUFIP. One agency will be recruited to support CMA for capacity building and urban reforms, participation and awareness consultant will support implementation of incentivized reform, capacity building and participation activities.

Each CMSC will require an estimated 2878 person-months national experts and will be responsible for the contract management and construction supervision, data collection and assessment, assisting ULBs to evaluate bids, supervising construction, monitoring and reporting to PMU on progress and compliances, assisting in the disbursement of funds and ensuring safeguard compliance in line with ADB requirements.

A governance improvement and awareness consultant (GIAC) will be recruited to assist the CMA (which is the implementing agency for governance and capacity building component and has administrative control over the ULBs) to support in implementing community participation, gender and social inclusion action plan, public awareness campaigns and incentivized governance improvement component

The consultants will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality: cost ratio of 90:10. Individual consultants will be recruited using a bio-data technical proposal

Procurement of civil works and goods including consulting services will follow ADB's Procurement Guidelines (2015, as amended from time to time). The procurement of consultants will follow ADB's Guidelines on the use of Consultants (2013, as amended from time to time). A procurement capacity assessment concluded the overall procurement risk for the project is moderate. The TNUIFSL has extensive experience in development partner-supported procurement of large works and will provide advisory support to ULBs and the CMA.


Responsible ADB Officer
Shoji, Hikaru
Responsible ADB Department
Sectors Group
Responsible ADB Division
Water and Urban Development Sector Office (SG-WUD)


Concept Clearance
11 Dec 2015
Fact Finding
23 Oct 2017 to 08 Nov 2017
29 May 2018
25 Sep 2018
Last Review Mission
Last PDS Update
25 Sep 2018


MFF Facility Concept 0105-IND

Financing Plan
  Total (Amount in US$ million)
Project Cost 1,266.40
ADB 500.00
Counterpart 766.40
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards - 0.00 0.00 %
Cumulative Disbursements - 0.00 0.00 %

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Tamil Nadu Urban Flagship Investment Program: Environmental Assessment and Review Framework Environmental Assessment and Review Framework May 2018
Tamil Nadu Urban Flagship Investment Program: Resettlement Framework Resettlement Frameworks May 2018
Tamil Nadu Urban Flagship Investment Program: Indigenous Peoples Planning Framework Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks May 2018

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.


No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Tamil Nadu Urban Flagship Investment Program: Procurement Plan Procurement Plans Dec 2017