The Asian Development Bank (ADB) is extending a $150 million financing facility to India to develop urban infrastructure in the National Capital Region (NCR).
The Manila-based bank's board, according to an ADB statement here, approved the ‘India National Capital Region Urban Infrastructure Financing Facility' for providing funds in two or more tranches. While providing long-term finance for improvement in urban services, it will also help in encouraging private investors for a regional rather than city-centric approach to development.
The first loan tranche of $78 million will have a 25-year term, including a five-year grace period, with an annual interest rate determined in accordance with ADB's LIBOR-based lending facility. An additional $50 million is to be provided by the NCR Planning Board for targeted investments. With the Planning Board as the executing agency, the investment programme is expected to be completed by June 2017.
India's economy, the statement said, has been growing at one of the fastest rates in the world. However, municipal governments have struggled to keep pace with the demand for services owing to financing and capacity constraints. The population in the NCR, incorporating Delhi and sub-regions of three States, is expected to almost double to 64 million by 2021 from 37 million now.
The NCR Planning Board has notified the ‘Regional Plan 2021' identifying investment needs totalling about $43 billion for development in sectors such as transport, power, water and solid waste. The financing facility will allow the planning board to accelerate planned investments by providing long-tenure funds.