ADB approves $200 million loan for reconstruction of roads in India

The Asian Development Bank (ADB) has approved a loan worth $200 million for the reconstruction of roads over 400km in the north-eastern parts of India.The financial aid, approved by the board of directors of ADB, will be released in two tranches. The financing will reportedly enhance roads in the states of Assam, Manipur, Meghalaya, Mizoram, Sikkim and Tripura.  The scope of the work will include widening existing sections of roads, strengthening pavements, raising embankments, and providing permanent structures at river crossings.Approximately $75 million will be released in the loan first tranche, which will upgrade more than 200km of roads in three states. It will have a 25-year term, with a grace period of five years and interest determined in accordance with ADB’s LIBOR-based lending facility.

The central and state governments will provide counterpart finance of $98.2 million for a total program investment cost of $298.2 million. The program will be executed by the Ministry of Development of North Eastern Region, along with the six state governments, which is set to be finished by the end of December 2016.ADB has said that support will be provided increase the capacity of state public works departments to carry out effective planning and asset management. The Japan Fund for Poverty Reduction, administered by ADB, will be provide a grant of $1.2 million to introduce modern road management practices.