The Asian Development Bank (ADB) and the Government of India signed a $220 million loan for improving connectivity as well as transport efficiency and safety on State Highways of Rajasthan.
The loan is the first tranche of the $500 million Rajasthan State Highways Investment Program, approved by ADB Board in May this year, that will upgrade about 2,000 kilometers of state highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements.
The project will help improve State Highways and major district roads in Rajasthan. It will also enhance the capacity of the State public works department in the areas of road asset management, road safety and project management.
One of the focus areas of the program is to attract private sector financing through government capacity building on public private partnership (PPP) development.
ADB will finance part of the construction costs for the annuity-based PPP concessions and engineering procurement construction (EPC) contracts, enhance the stability of contract regime, and ensure good governance during project implementation.
The first tranche loan will improve about 1,000 kilometers of State Highways and major district roads. It will have a 25-year term, including a grace period of 8 years, and carry an annual interest rate determined in accordance with ADB’s London interbank offered rate-based (LIBOR) lending facility.
The total cost of the project is $1.415 billion, with the government contributing $465 million and $450 million coming from the private sector and other concessionaries.
