ADB approves $400 million loan for better infra in Indian cities

The Asian Development Bank (ADB) has approved a $400 million loan to support the Indian government in improving the quality of urban life through the creation of high-quality urban infrastructure, assured public services, and efficient governance systems.

The loan under Subprogramme 2 will support investment planning and reform actions at the state and urban local body (ULB) levels, the ADB said.

“India has recognised the potential for cities to be centers of economic growth and has emphasised the need to make cities livable through inclusive, resilient, and sustainable infrastructure, which is also in line with ADB Strategy 2030,” said ADB Principal Urban Development Specialist Sanjay Joshi.

“The national flagship program of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 is targeted for universal access of water supply and sanitation and to ensure urban water security through reducing water losses, recycling treated sewage for non-domestic use, rejuvenation of water bodies, and maintaining sustainable ground water levels," the ADB statement said with reference to the loan.

ADB will continue to provide knowledge and advisory support to the Ministry of Housing and Urban Affairs in program implementation, including monitoring and evaluation.

ADB will focus on lower-income states, which require support in capacity building, institutional strengthening, and policy reforms, the statement added.

Cities will be incentivised to become creditworthy through various reforms on enhancing their revenues such as property taxes and user charges, improve their efficiencies, and rationalise their expenditures.

This will substantially help cities mobilize innovative financing such as commercial borrowings, issuance of municipal bonds, sub-sovereign debts, and public–private partnerships to bridge significant deficit in urban infrastructure investments.