India and ADB signed loan agreement to improve rural roads in 5 States

The Government of India (GOI) and Asian Development Bank (ADB) signed a $275 million loan agreement to continue improving rural roads in the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal. The loan represents the second tranche of $800 million financing facility under the Rural Connectivity Investment Program (RCIP).

• Joint secretary of Department of Economic Affairs, Ministry of Finance, Mr. Nilaya Mitash and Country Director of ADB, Ms. M. Teresa Kho signed the pact.
• Executing agency of the project: Ministry of Rural Development (MORD) at the central level, while the state governments of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal are charged with overall implementation at the state level for a period of 43 months.
• The loan will construct 3,693 km of all-weather rural roads in the states which will benefit nearly 1,800 rural habitations.
• Second phase of project is expected to be completed in June, 2017.
• The central government will provide counterpart funds of $81.56 million for a total second tranche project investment cost of $356.56 million. 

Rural Connectivity Investment Programme (RCIP): A multi-tranche financing facility (MTFF) started by Asian Development Bank (ADB). RCIP will construct or upgrade the 9000 km of rural roads to an all-weather standard connecting around 4800 habitations in the States of Assam, Chhattisgarh, Odisha, Madhya Pradesh and West Bengal. 
Note: The second tranche from the ordinary capital resources of ADB has a 25-year term including a grace period of 5 years, commitment charge of 0.15% per year, and interest rate to be determined in accordance with ADB’s LIBOR-based lending facility.

Month: Current Affairs - February, 2014