NEW DELHI, INDIA (23 May 2017) — The Asian Development Bank (ADB) has approved a multitranche financing facility (MFF) worth up to $500 million for an investment program to help improve connectivity as well as transport efficiency and safety on state highways of Rajasthan in northern India.
“Through an approach of public-private partnerships (PPPs), the investment program will vastly improve connectivity allowing greater access to jobs, markets, services, and social opportunities in Rajasthan,” said Chen Chen, an ADB Senior Transport Specialist. “At the same time, it will assist the state and national governments in firming up their business processes focused on PPPs.”
Rajasthan is India’s largest state by area, accounting for about 10% of the country’s total land area and nearly 5.6% of the total population at around 68.5 million. Although the state has strong potential for growth, particularly in agriculture, mining, agro-based industries, and tourism, this potential remains underutilized due to poor connectivity to markets and social services.
The Rajasthan State Highway Investment Program will upgrade about 2,000 kilometers (km) of state highways and major district roads to two-lane or intermediate-lane standards to meet national road safety requirements. The program will also improve road asset management, road safety, and project management capacity of the state Public Works Department. The project will achieve this by upgrading the department’s business processes and procedures of its PPP division while implementing a project performance monitoring system.
The first tranche of the MFF is estimated to cost $655 million — with ADB financing $220 million — and will deliver the first 1,000 km of state highways and major district roads improvement in Rajasthan, while also undertaking the government capacity building on PPP development. The remaining $280 million from ADB’s financing will be earmarked for the program’s second tranche worth $760 million.
The total cost of the project is $1.415 billion, with the Government of India contributing $465 million and $450 million coming from the private sector and other concessionaires.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.