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ADB, India Sign $250 Million Loan to Improve Rural Connectivity in 5 States

The Asian Development Bank (ADB) and the Government of India today signed a $250 million loan to finance the construction of 6,254 kilometers (km) of all-weather rural roads in the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal under the prime minister’s rural roads program (PMGSY).

The agreement was signed by Sameer Kumar Khare, Joint Secretary (Multilateral Institutions) at the Department of Economic Affairs of the Ministry of Finance, and Kenichi Yokoyama, ADB Country Director for India, at a ceremony in New Delhi.

The loan’s first tranche is part of the $500 million Second Rural Connectivity Investment Program for India approved by ADB in December 2017. The program is aimed at improving rural connectivity, facilitating safer and more efficient access to livelihood, and socio-economic opportunities for rural communities through improvements to about 12,000 km of rural roads across the 5 states.

“The ADB-funded investment program will provide continued assistance to the PMGSY and support the government’s long-term goal for rural development,” said Mr. Khare. “The program is likely to have a transformative impact in terms of rural economy and would also bring in greater efficiency in terms of access and connectivity for the rural people in the 5 states. Under the project, about 2,000 technical personnel would be imparted training on road safety and maintenance.”

“The investment program will support the government’s drive for innovative approaches to reduce costs, conserve non-renewable natural resources, and promote the use of waste materials in rural road construction,” said Mr. Yokoyama. “Road maintenance will be ensured through the provision of a 5-year post-construction maintenance in each civil works contract.”

The investment program builds on the $800 million ADB-financed First Rural Connectivity Investment Program in 2012, which added about 9,000 km of all-weather rural roads in the same states.

In view of increased rainfall and storm surges in the project states, the road designs will take into account these climate risks with measures such as greater elevation of road embankments, slope protection, and better drainage in flood-prone areas. Women were extensively consulted during the project design and will gain some key benefits, including improved access to healthcare, livelihoods, and schooling.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region.

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