India-ADB sign 177 million USD to develop roadways

On October 19, 2020, the Government of India and the Asian Development Bank (ADB) signed an agreement of 177 million USD to upgrade 450 km of district roads and state highways in the state of Maharashtra.

Highlights

The loan agreement was signed between the Department of Economic Affairs operating under Ministry of Finance, Maharashtra State Road Improvement Project and ADB. These roads will improve the connectivity between urban and rural areas. It will enable better access to markets in the rural areas. Also, the roads will improve mobility and livelihood opportunities outside the major urban centres reducing income disparities.

The project will also train Public Works Department staff to build their capacity in climate change adaptation and disaster resilient features.

Power Supply Project

On October 19, 2020, the Government of Maharashtra and ADB signed 346 million USD loan for power supply project in rural Maharashtra. Under the project, reliable and efficient power is to be provided to the agricultural customers in the rural areas of Maharashtra. The funds from ADB are to be used to install 46,800 km of power grid, construction and upgradation of distribution stations. The ADM will also provide 1 million USD of technical assistance to demonstrate water conservation and energy conservation efforts.

The power supply loan is being provided under results-based lending (RBL) modality of ADB

RBL modality

The loan being provided for the Power Supply Project is the first RBL modality loan in South Asia. It is a type of financing where the loan disbursement is done based on performance. It was introduced in 2013. Since 2019, it has become a regular modality.

The RBL Modality aims to increase accountability, support public ownership, encourage institutional development, reduce transaction costs, support coordination and improve effectiveness and efficiency of the public sector programmes.

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