NEW DELHI -- The Asian Development Bank (ADB) and the Government of India today signed a $275 million loan to continue improving rural roads in the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal.
The loan represents the second tranche of an $800 million financing facility under the Rural Connectivity Investment Program. The loan will construct 3,693 kilometers of all-weather rural roads in the five states, benefiting nearly 1,800 rural habitations.
Taking part in the signing ceremony on behalf of the Government of India was Nilaya Mitash, Joint Secretary (Multilateral Institutions), Department of Economic Affairs at the Ministry of Finance and on behalf of ADB, M. Teresa Kho, Country Director, ADB'sIndia Resident Mission. The project agreements were signed by senior officials from the five states.
"Poor rural connectivity affects economic growth in rural areas and has a strong link to poverty, particularly in these five states. The second stage of this loan will invest in physical infrastructure, improve road design, road safety, and asset management," said Ms. Kho.
"The project will help construct all-weather roads in rural areas that will improve access to markets, district headquarters, health and education facilities, and other centers of economic activity," said Mr. Mitash.
The Ministry of Rural Development (MORD) is the executing agency of the project at the central level, while the governments of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal are charged with overall implementation at the state level for a period of 43 months. The second tranche is expected to be completed in June 2017. The implementing agencies at the state level will be the respective State Rural Roads Development Agencies.
The second tranche from the ordinary capital resources of ADB has a 25-year term including a grace period of 5 years, commitment charge of 0.15% per year, and interest rate to be determined in accordance with ADB'sLIBOR-based lending facility. The Government of India will provide counterpart funds of $81.56 million for a total second tranche project investment cost of $356.56 million.