The Asian Infrastructure Investment Bank (AIIB) has approved the $150-million ‘Chennai City Partnership: Sustainable Urban Services Programme’ that seeks to strengthen institutions and improve the quality and financial sustainability of selected urban services in Chennai.

“Tamil Nadu is an economic powerhouse and is one of India’s most urbanized States. Chennai dominates the State’s demographic and economic landscape and is experiencing rapid physical growth and changes in its boundaries. However, Chennai faces tremendous infrastructure deficits and low service quality in core urban sectors such as water resource management, water supply and sanitation, urban mobility, solid waste management and public health,” the Beijing-based multilateral development Bank said in a statement.

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“AIIB is adapting and innovating constantly to deliver investment solutions that overcome the challenges our members face,” said D J Pandian, Vice President, Investment Operations, AIIB.

“In this case, we are helping India to increase their resilience and meet their objectives even during the most difficult times. We envision this project as a first-phase engagement and a building block for AIIB’s long-term partnership with India and - in this particular case, Chennai - by supporting the government’s programme of expenditures. As a subset of the overall government programme, this financing will cover core urban services and is aligned with AIIB’s mandate, thematic priority to promote green infrastructure, and sustainable cities strategy,” Pandian added.

Aside from urban infrastructure delivery gaps, Chennai has operating frameworks that focus on infrastructure asset creation rather than on service delivery performance in terms of coverage, quality, sustainability and resilience. There is also lack of sustainable financing frameworks, with very low own-source revenue generation, excessive and unsustainable reliance on the State government for input-based budget allocations and operating subsidies.

Vulnerable to natural disasters

Chennai is also highly vulnerable to natural disasters, climate change and pandemics, as demonstrated by the Covid-19 emergency. The crises induced by Covid-19 have highlighted the need for better services as well as limitations of current delivery models. The pandemic created the momentum for Tamil Nadu to pivot toward sustainable infrastructure delivery and building back better and greener.

The programme will complement AIIB-supported urban transport projects-such as the Chennai Metro Rail (Phase 2, Corridors 4 and 5) and Peripheral Ring Road-by improving integration of public transport modes (in terms of routes, institutions and technology) and strengthening relevant institutions.

“AIIB’s mission is to finance ‘Infrastructure for Tomorrow’ (i4t)-green infrastructure with sustainability, innovation and connectivity at its core. We are fully supporting our member, India, in their mission to increase the resilience of Chennai and transforming the city into a green, livable, competitive and resilient capital,” the bank added.

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