$84 Million Loan for Improvement and Expansion of Water Supply in the Bihar (Download PDF)

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The Government of India and Asian Development Bank (ADB) signed a $84 million loan for improvement and expansion of water supply in Bhagalpur and Gaya town in Bihar. The Project will provide access to better quality and sustainable water supply, for the people of Bhagalpur and Gaya towns.

Image of Expansion of Water Supply in the Bihar

Image of Expansion of Water Supply in the Bihar

Image of Expansion of Water Supply in the Bihar

How is the Loan Going to Help Bihar?

  • The tranche 2 loan is part of the $200 million multi-tranche financing facility (MFF) for the Bihar Urban Development Investment Program.

  • 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 litres per capita per day in both cities.

  • The loan finances will support civil works subprojects and would benefit 1.1 million people in the two project towns with increased coverage of treated water supply by 2021

  • The loan would support training of 400 urban local body (ULB) staff in the management and operation and maintenance (O&M) of water supply systems, and help ULBs improve technical and financial management of the water supply operations.

Background

  • The program was approved by ADB in 2012 to provide sustainable urban infrastructure and services in four towns in Bihar - Bhagalpur, Gaya, Darbhanga and Muzaffarpur.

  • The two towns under the project would achieve the national urban service goals or match many of the national averages for urban service delivery performance in India.

  • The investment program will assist ULBs in designing affordable tariffs for O&M cost recovery.

Repayment of Loans

  • The loan will have a 25-year term, including a grace period of 5 years.

  • The annual interest rate determined in accordance with ADB’s lending facility based on the London interbank offered rate (LIBOR), and a commitment charge would be 0.15 % per year.

What is ADB?

The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966 headquartered in Philippines.

  • The company maintains 31 field offices around the world to promote social and economic development in Asia.

  • The bank admits the members of the United Nations Economic and social Commission for Asia and the Pacific. (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.

  • From 31 members at its establishment, ADB now has 67 members, of which 48 are from Asia and the Pacific and 19 outside.

What is Tranche?

  • In structured finance, a tranche is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice

- Published/Last Modified on: May 29, 2018

Policy/Governance, Economy

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