India and ADB Ink $400 million loan pact for high-quality urban infrastructure development

Earlier this week, the Central Government sealed a USD 400 million policy-based loan deal with the Asian Development Bank (ADB) in Manila. The loan aims to bolster the country's urban reform agenda by enhancing urban infrastructure, service delivery, and governance systems.
The loan agreement for sub-programme 2 of the Sustainable Urban Development and Service Delivery Programme was inked by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, and Takeo Konishi, Country Director of ADB's India Resident Mission.
This instalment follows Sub-programme 1, which received a financing of USD 350 million in 2021, focusing on establishing national-level policies and guidelines to enhance urban services. Sub-programme 2, however, is geared towards supporting investment planning and reform actions at the state and urban local body (ULB) levels.
According to the finance ministry, this initiative aligns with the government's urban sector strategy, concentrating on reforms to create livable cities fostering economic growth through inclusive, resilient, and sustainable infrastructure.
Sub-programme 2 extends support to state and ULB reforms to actualize the national flagship programme - Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0. The goals include universal access to water supply and sanitation, reducing water losses, recycling treated sewage, reviving water bodies, and ensuring sustainable groundwater levels.
Additionally, the programme envisions comprehensive urban planning reforms to regulate urban sprawl and promote systematic urbanization. It emphasizes legal, regulatory, and institutional reforms, capacity building for ULBs, and community awareness.
The focus areas span from modernizing building bylaws, fostering urban agglomeration, and comprehensive urban mobility planning to integrate climate resilience, nature-based solutions, and financial sustainability into urban environments. The plan also incentivizes cities to enhance their revenue streams, efficiency, and expenditure rationalization, empowering them to mobilize innovative financing for urban infrastructure investments.
Such initiatives are anticipated to facilitate cities in accessing innovative financing options like commercial borrowings, municipal bonds, sub-sovereign debts, and public-private partnerships. This approach aims to bridge gaps in urban infrastructure investments and elevate cities' creditworthiness.
In conclusion, the loan agreement between the central government and the ADB signifies a pivotal step towards fortifying the country's urban infrastructure and service delivery. The focus on sustainable urban development aligns with the government's vision to create resilient and inclusive cities, fostering economic growth and improving living standards for urban populations.

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India and ADB Ink $400 million loan pact for high-quality urban infrastructure development

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