Asian Development Bank to lend $63.3 million for urban services in North Karnataka

NEW DELHI: The government has signed an agreement with the Asian Development Bank ( ADB) for $63.3 million loan to improve urban municipal services in 14 towns in north Karnataka.

"The ADB and the government today signed an agreement for a $63.3 million loan that will help improve urban services and strengthen municipal and project management capacity in 14 towns of North Karnataka," ADB said in a release today.

This is the fourth and the last tranche of loan under the North Karnataka Urban Sector Investment Programme to help upgrade infrastructure.

The programme includes expansion of the potable water systems to provide continuous water supply with private sector participation in 12 towns, completion of sewerage networks in three towns and improvements to the road network in two towns.

"The project will assist the implementation of public-private partnership in the design, construction, and operation and maintenance of infrastructure facilities for efficient and equitable provision of basic urban infrastructure and services," said M Teresa Kho, Country Director of India Resident Mission, ADB.

"The project will also provide assistance to connect beneficiaries to sewer networks and also provide training and certification for plumbers, generating in this way local service and employment, " she said.

The $270 million overall investment programme aims to improve basic urban services for at least 4.3 million people living in 25 North Karnataka towns by providing them with improved water supply, faster urban transportation, and other public facilities.

These improvements are expected to enhance living conditions and enable selected urban local bodies to provide services of a reasonable quality for their residents, bringing North Karnataka services up to the same level as the rest of the state.

The loan has been provided by ADB's ordinary capital resources having a 25-year term with a grace period of five years.

The interest rate will be in accordance with ADB's LIBOR-based lending facility.

Government will provide counterpart funds of $27.8 million in this tranche.