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ADB to fund Rural Roads in India, approves $ 500 million

The investment program will construct and upgrade over 12,000 kilometers of rural roads in the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal.

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The Asian Development Bank’s (ADB) has approved a multi-tranche financing facility (MFF) for the Second Rural Connectivity Investment Program totalling $500 million to improve rural roads in five Indian states.

“All-weather roads are crucial for economic growth, especially in India’s rural areas,” said Andri Heriawan, an ADB Transport Specialist. “Building on the success of our previous assistance in the rural roads sector, ADB will work closely with the Government of India to provide the connectivity to improve rural communities’ access to markets, health centres, education facilities, and other opportunities.”

Rural roads are vital components of India’s overall road network, comprising 80% of all paved roads in the country and connecting rural areas with major district roads, state roads, and national highways. Recognizing this, the investment program will construct and upgrade over 12,000 kilometres (km) of rural roads in the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal. It will also support the state governments to improve rural road maintenance and safety.

The program builds on the first Rural Connectivity Investment Program in 2012, financed by ADB through an $800 million MFF, which added about 9,000 km of all-weather rural roads in the same states.

The investment program’s first tranche, amounting to $250 million, expected in December 2017, will construct an initial 6,254 km of all-weather rural roads. It will also pave the way for the training of about 2,000 project engineers on road safety and road maintenance. The program’s second tranche, for the same amount, is expected to come in the third quarter of 2019.

The investment plan supports the government’s drive for innovative approaches to reduce costs, conserve non-renewable natural resources, and promote the use of waste materials in rural road construction. Given that the project states are expected to see increased rainfall and storm surges, the road designs will take into account these climate risks with measures such as greater elevation of road embankments, slope protection, and better drainage in flood-prone areas.

Women were extensively consulted during the project design and will gain some key benefits, including improved access to healthcare, livelihoods, and schooling. In addition, at least a third of workers hired in road construction and maintenance works will be women. 

Apart from the MFF, ADB will also provide a $500,000 technical assistance (TA) grant from its Technical Assistance Special Fund to strengthen the sustainability of rural road assets, disaster resilience, and innovation in rural road development. The TA is due for completion in December 2021, with the investment program expected to be completed by the end of 2023.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. It is owned by 67 members—48 from the region. In 2016, ADB assistance totalled $31.7 billion, including $14 billion in cofinancing.


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