ADB inks pact for $125 mn loan to improve water supply in Uttarakhand; approves another $350 mn to help improve urban services in India

The Asian Development Bank (ADB) has approved a $350 million policy-based loan to improve urban services in India even as it has signed a $125-million loan pact with the Indian Government to improve access to safe and affordable drinking water and city-wide inclusive sanitation services in Dehradun and Nainital cities of Uttarakhand.

The Manila-based lender said in an official statement that the $350 million loan supports the policies established by the Union Housing & Urban Affairs Ministry to accelerate universal coverage of piped water supply and improved sanitation under the recently launched Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0.

The loan will also be used to provide affordable housing to all, including poor, urban migrant and industrial workers, under another flagship mission Pradhan Mantri Awas Yojana. The programme will benefit the urban poor, including other disadvantaged, economically weaker section and low-income groups.

“This loan supports the government’s agenda in transforming cities into economically vibrant and sustainable communities, continuing ADB’s long-term engagement with India to improve basic urban services delivery in various states,” said ADB Principal Urban Development Specialist for South Asia Sanjay Joshi.

“Efforts to improve urban water supply, sanitation, and affordable housing as well as performance-based fiscal transfer will help the country accelerate reforms in urban service delivery and COVID-19 recovery initiatives.”

India’s current estimated urban population of 460 million is the second-largest in the world and is projected to reach nearly 600 million by 2030, growing at an annual rate of over two per cent. As urban areas will continue to contribute over 60 per cent of gross domestic product, cities will become a strong engine of growth for India—generating economic activity and outputs, creating jobs for a significant volume of workers, improving competitiveness and urban livability, and protecting the environment.

Meanwhile, the Uttarakhand loan will be used in a project that aims to construct 136 kilometers (km) of water pipe system to replace defective water networks in south Dehradun to ensure reliable and continuous water supply to benefit an estimated 40,000 people, including 4000 urban poor and vulnerable groups. Water meters will also be installed in about 5400 households to support efficient water use and consumption billing.

ADB will provide knowledge and advisory support to the Ministry in programme implementation, including monitoring and evaluation. It will also help select low-income states and urban local bodies to implement policy reforms, prepare investment plans, and provide recommendations on cross-cutting issues like climate change, environmental and social safeguards assessment, and gender equality and social inclusion.

In addition, the project will establish sewage treatment plants in Dehradun, supported by 256 km of enclosed underground sewer networks and 117 km of storm water drainage networks benefiting an estimated 138,000 residents, including 15000 urban poor and vulnerable people. A total of 17410 households in Dehradun will be connected to this sewerage system.

Replacing the aging sewage treatment plant with a new one using advanced technology, and trunk sewer rehabilitation in Nainital, the project will ensure resilient and reliable sanitation services to the entire population of about 154,000 people.

For the Uttarakhand Integrated and Resilient Urban Development Project, ADB will provide a $250,000 technical assistance (TA) grant from its Technical Assistance Special Fund and another $750,000 grant from its Climate Change Fund to further strengthen climate-resilient urban planning and development of the state by carrying out a thorough assessment, supporting science-based decision making, developing smart climate resilient urban planning tools, and capacity-building activities.

“The project addresses the need for upgrading urban services in the fast-expanding capital city of Dehradun and Nainital which attracts thousands of tourists daily”, said Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance.

The improved water and sanitation services will also promote better hygiene practices that will help protect people from future pandemic and epidemic diseases, he added.

“The project complements previous ADB support to improve water supply and sanitation service (WSS) in the two cities with a focus on ensuring high-quality service delivery and a citywide sanitation approach to make it cost-effective. Computerized maintenance and management systems will be introduced to advance the system operation and asset management while ensuring users’ satisfaction”, said ADB’s Country Director of India Resident Mission Takeo Konishi.