India-ADB Current Affairs

India inks $120 Million Loan agreement with to improve Rail Infrastructure

Government has inked $120 million loan agreement with Asian Development Bank (ADB) for completion of projects to improve Rail Infrastructure along high-density corridors and operational efficiency of Indian railways.

The loan has 20-year term, including grace period of 5 years and have annual interest rate determined according to ADB’s London interbank offered rate (LIBOR) based lending facility, and commitment charge of 0.15% per year.

Rail Infrastructure Improvement Project

The loan amount is 3 tranche of $500 million multi-tranche financing facility for Railway Sector Investment Program approved by ADB Board in 2011. The loan amount will be used to complete the ongoing works commenced under earlier tranches.

The project is aimed at enhancing efficiency of rail infrastructure through electrification, introduction of modern signaling system and doubling rail tracks on key routes in country.  It will help to develop energy-efficient, safe, and reliable railway system that will result in reduced travel time along project rail routes and improved operational and financial efficiency.

Funding will contribute towards achieving overall program outputs of double-tracking about 840 kms of rail routes and electrification of 640 kms of tracks along high density corridors. It will also help to implement new accounting systems and provide additional safety measures including collision avoidance equipment.

The loan proceeds will be used for busy freight and passenger routes in Chhattisgarh, Odisha, Maharashtra, Karnataka and Andhra Pradesh, including “Golden Quadrilateral” corridor that connects Chennai, Kolkata, Mumbai and New Delhi.

Asian Development Bank (ADB)

ADB is regional development bank which aims to promote social and economic development in Asia. It was established in 1966. It is headquartered in Manila, Philippines. Now it has 67 members, of which 48 are from within Asia and the Pacific and 19 outside.

The ADB has been modelled closely on World Bank. It has similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions. As of 2014, Japan was largest shareholder (capital subscription) having 15.7% shares followed by US (15.6%), China (6.5%), India (6.4%), and Australia (5.8%).

Month: Categories: India Current Affairs 2018

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Government inks loan agreement with ADB for Improvement and Expansion of Water Supply in Bihar

The Union Government has inked $84 million loan agreement with Asian Development Bank (ADB) for improvement and expansion of water supply in Bhagalpur and Gaya towns in Bihar. The loan has 25-year term, including grace period of 5 years with annual interest rate determined in accordance with ADB’s lending facility based on London interbank offered rate (LIBOR) and commitment charge of 0.15% per year.

Key Facts

This agreement is for tranche 2 loan, part of $200 million multi-tranche financing facility (MFF) for Bihar Urban Development Investment Program that was approved in 2012 by ADB. The program aims to provide sustainable urban infrastructure and services in four towns in Bihar –Gaya, Bhagalpur, Darbhanga and Muzaffarpur.

The project 2 will improve access to better quality and sustainable water supply, for people of Bhagalpur and Gaya towns. It will help two towns to achieve national urban service goals or match many of national averages for urban service delivery performance in India. The investment program will assist urban local body (ULBs) in designing affordable tariffs for operation and maintenance (O&M) cost recovery.

Significance of project

The project will 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 will benefit 1.1 million people in two project towns with increased coverage of treated water supply by 2021. It will also train 400 urban local body (ULB) staff in management and O&M of water supply systems and help ULBs improve technical and financial management of water supply operations.

Month: Categories: India Current Affairs 2018

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