India, ADB inks $220 million Loan Agreement for Rajasthan State Highways Investment Program

India, ADB inks $220 million Loan Agreement for Rajasthan State Highways Investment Program

  • The Asian Development Bank (ADB) and the Government of India on 3rd June signed a $220 million loan agreement meant to improve connectivity, transport efficiency, and safety on the State highways of Rajasthan.
  • “The loan is the first tranche of the $500 million Rajasthan State Highways Investment Program, approved by ADB Board in May this year, that will upgrade about 2,000 km of State highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements,” the government said in a release.
  •  “The first tranche loan will improve about 1,000 km of State highways and major district roads,” the release added.
  • Rajasthan State Highways Investment Program aims improve State Highways and major district roads in Rajasthan.
  • It will enhance the capacity of the State public works department (PWD) in the areas of road asset management, road safety and project management.
  • One of the focus areas of the program is to attract private sector financing through government capacity building on public private partnership (PPP) development.
  • ADB will finance part of the construction costs for the annuity-based PPP concessions and engineering procurement construction (EPC) contracts.
  • It will also enhance the stability of contract regime, and ensure good governance during project implementation. The first tranche loan will improve about 1,000 kilometres of State Highways and major district roads.
  • It will have a 25-year term, including a grace period of 8 years. The loan will carry an annual interest rate determined in accordance with ADB’s London interbank offered rate-based (LIBOR) lending facility.
  • The total cost of the project is $1.415 billion, of government contributing $465 million and $450 million from the private sector and other concessionaries.