The World Bank and the government of Tamil Nadu on Thursday signed a loan and project agreement that would enable the international bank to provide $400 million to the government for its Sustainable Urban Development Project.
The loan agreement, signed by Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, and Onno Ruhl, country director, World Bank (India), will provide two-thirds of the $600 million that has been budgeted for the project.
The project aims at improving urban services in participating Urban Local Bodies (ULBs) in a financially sustainable manner and piloting improved urban management practices in selected cities. As such, the project consists of three parts — investment in urban services including water, sewerage, municipal solid waste, urban transportation and storm water drainage; results-based grants for urban governance; and urban sector technical assistance to strengthen the capacity of ULBs and urban sector officials.
Earlier in the year, the government of Tamil Nadu, along with the Centre, signed a $300-million loan agreement for the Second Tamil Nadu Road Sector Project. The aim of the project was to improve the capacity, quality and safety of Tamil Nadu’s core road network.
These two loan agreements add to the World Bank’s portfolio in Tamil Nadu, which amounted to $1,012.6 million as of May 2014.
Prior to these two agreements, the World Bank has been supporting three single-state projects amounting to $541.7 million. These include the Tamil Nadu Empowerment and Poverty Reduction Project (RWSRP), the Tamil Nadu Irrigated Agriculture Modernisation and Water Bodies Restoration and Management Project, and the Tamil Nadu Health Systems Project. Apart from this, there are five multi-state projects being implemented in Tamil Nadu, with the State’s share amounting to $470.9 million.
While it looks like the World Bank is increasingly putting money in Tamil Nadu, the overall scenario in India is one of fluctuating funding. From providing $5,563 million to India in 2011, the World Bank’s loans to the country reduced to $1,334 million in 2013, only to rise again to $5,236 million in 2014. So far, the 2015 amount stands at $2,378 million.
