ADB commits $3.92 bn loans to India in 2020
Expects to help expand the country’s infrastructure development
The Asian Development Bank (ADB) committed $3.92 billion in sovereign loans to India for 13 projects, ADB’s highest-ever annual lending commitment to India since the start of its lending operations in 1986.
“ADB is expanding assistance to quality infrastructure development to support India’s fast economic recovery. ADB’s lending assistance will be further supported with knowledge work to help develop transformative projects”, says ADB Country Director for India Takeo Konishi.
Throughout 2020, ADB continued its regular assistance to energy, transport, urban development and public sector management in India. Among the new projects committed in 2020 included $500 million to build a modern, high-speed 82-kilometer Delhi–Meerut Regional Rapid Transit System corridor; energy sector loans to strengthen distribution network in Maharashtra, Karnataka, Uttar Pradesh and Meghalaya; and support to build a 120-megawatt hydroelectric power plant in Assam. In the urban sector, ADB approved loans for sustainable urban development in secondary and smaller towns in Rajasthan and Madhya Pradesh. ADB also committed funds to support the Government of West Bengal’s fiscal consolidation program.
The Project Readiness Financing (PRF) for ‘Sikkim major district roads upgradation’ will fund consulting services for (i) initial screening of the tentative list of candidate roads and bridges; (ii) feasibility studies of the shortlisted roads for final selection; (iii) detailed design for selected road and bridge subprojects, including the environmental and social safeguard assessments and preparation of environmental and social safeguard planning documents, cost estimate, economic analysis, due diligence and capacity building on financial management, assistance and capacity building on procurement, preparation of bid documents and supporting the bidding process until contract award; and (iv) providing assistance for developing the institutional strengthening and capacity development component of the ensuing project.
The benefits of the proposed loan for Gujarat Paguthan wind energy project include (i) addition of 132.8 MW (50.4 MW for Samana – Phase II, and 82.4 MW for Saundatti) of power generating capacity to help reduce the growing supply deficit in India; (ii) development of new renewable energy sources, which will decrease fossil fuel consumption and reduce the emission of greenhouse gases and other pollutants; (iii) and demonstration of the successful implementation of large-scale wind power projects by the private sector.
HELPING COVID RESPONSE
The funding of $3.92 billion includes $1.8 billion in projects to support the Government of India’s response to the covid pandemic. ADB also committed $356.1 million through its non-sovereign operations to India, including 3 covid related projects.
“Going forward, ADB stands ready to provide additional resources to address India’s many covid related challenges, including funds to expedite the country’s ongoing vaccination program and build the health system’s resilience against future shocks, with supplementary support to protect small businesses and underpin education and social protection,” says Takeo Konishi.
STRONGER ASIA
At a recent 54th annual meeting of the Board of Governors of ADB, its President Masatsugu Asakawa said the Asia-Pacific region can emerge from the pandemic even stronger than before by focusing on 5 areas to help achieve a prosperous, inclusive, resilient, and sustainable future. “I believe the path we have laid out will help lead our region out of these uncertain times,” he had said and added: “We will continue to deliver ADB’s unique synergy of finance, knowledge, and partnerships. And we will prioritize the quality of our assistance over quantity, meeting near-term needs with a clear vision for the future. If we stay on this course, I am confident the region will emerge from the current crisis even stronger than before.”
Asakawa explained the 5 focus areas: 1. Place ambitious climate actions at the centre of development, with increased focus on adaptation and resilience and with full commitment to the goals of the Paris Agreement.
2. Address inequality including the gender gap – which has worsened during the pandemic – by investing in health, education, and social protection. 3. Promote high-quality green and digital infrastructure, enabling economies to rebuild smartly while closing the digital gap and attracting substantial private investment.
4. Deepen regional cooperation and integration, so that ADB developing member countries can seize the opportunities of renewed globalization and strengthen regional health security. 5. Strengthen domestic resource mobilization, to ensure that governments have the resources they need to finance sustainable growth and respond effectively to future crises.