India Secures USD 400 Million ADB Loan for Cutting-Edge Urban Infrastructure Development

In a landmark move, the central government has inked a USD 400 million policy-based loan pact with the Asian Development Bank (ADB) to bolster its urban reform agenda. Aimed at crafting superior urban infrastructure, enhancing service delivery, and instilling efficient governance systems, the loan agreement underlines the nation’s commitment to sustainable urban development.

Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, and Takeo Konishi, Country Director of ADB’s India Resident Mission, formalized the deal for sub-programme 2 of the ‘Sustainable Urban Development and Service Delivery Programme.’ This strategic initiative, following the USD 350 million sub-program 1 approved in 2021, focuses on implementing national-level policies and guidelines to uplift urban services.

Mukherjee emphasized that the program aligns with the government’s urban sector growth strategy, supporting reforms initiated by states and urban local bodies (ULBs). Notably, sub-program 2 backs investment planning and reform actions at the state and ULB levels, targeting the objectives of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0.

Takeo Konishi highlighted the sub-program’s role in achieving urban water security, reducing water losses, recycling treated sewage, and rejuvenating water bodies. The comprehensive approach includes integrated urban planning reforms, controlling sprawls, and promoting planned urbanization through legal, regulatory, and institutional enhancements. ULBs will drive the modernization of building bylaws, land pooling, urban agglomeration, and comprehensive mobility planning.

Crucially, the program incentivizes cities to become creditworthy by enhancing revenues through property taxes and user charges, improving efficiency, and rationalizing expenditures. The government anticipates a substantial impact, empowering cities to explore innovative financing avenues like commercial borrowings, municipal bonds, and public-private partnerships to bridge urban infrastructure investment gaps.”