Asian Development Bank to give $84m loan for water projects in Bihar

Multi-lateral funding agency Asian Development Bank (ADB) on Friday signed a $84 million loan agreement to finance water supply projects in two cities of Bihar.

The loan will finance water supply improvements and expansion in Bhagalpur and Gaya towns in Bihar, ADB said in a statement.

This is the second tranche of ADB’s $200 million multi-tranche financing facility for Bihar Urban Development Investment Programme, which was approved in 2012.

The Manila-headquartered funding facility is aimed at providing sustainable urban infrastructure and services in Bhagalpur, Gaya, Darbhanga and Muzaffarpur in Bihar.

“The Project 2 will improve access to better quality and sustainable water supply for the people of Bhagalpur and Gaya towns. It will also promote better water management practices that will result in a citywide coverage with 24-hour uninterrupted supply of treated water of 135 liters per capita per day in both cities,” said Sameer Kumar Khare, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance.

The loan agreement was signed by Khare and ADB India’s Resident Mission Country Director, Kenichi Yokoyama.

“The loan finances will support civil works sub-projects and would benefit 1.1 million people in the two project towns with increased coverage of treated water supply by 2021; train 400 urban local body (ULB) staff in the management and operation and maintenance of water supply systems and help ULBs improve technical and financial management of the water supply operations,” Yokoyama said.

ADB said the two towns (Bhagalpur and Gaya) would achieve the national urban service goals or match many of the national averages for urban service delivery performance in India.

The investment programme will assist ULBs in designing affordable tariffs for operations and maintenance cost recovery.

The loan with a 25-year term, includes a grace period of 5 years.