Madhya Pradesh to get $270 mn ADB loan to improve urban water services; Rajasthan gets $300 mn for water supply, sanitation

The Asian Development Bank (ADB) has signed an agreement with the Indian Government for a $270 million loan to develop water supply and integrated storm water and sewage management infrastructure and strengthen capacities of urban local bodies (ULBs) for improved service delivery in Madhya Pradesh even as the Manila-based multilateral lending institute has extended a $300 million loan to finance sustainable water supply and sanitation infrastructure and services in 14 towns of neighbouring Rajasthan.

The agreement is the second phase of the Madhya Pradesh Urban Services Improvement Project, following an original loan of $275 million signed in 2017. It will expand the outcome of the current project by covering additional 64 small cities, benefiting 185,000 households that consist of about 1.3 million people.

The programme will also develop water supply networks and build capacity at the local level, in particular at the Urban Development and Housing Department and Madhya Pradesh Urban Development Company Limited. 

Specifically, the project will pilot an integrated urban development approach to improve urban water service delivery and to expand networks in two urban areas. It is expected that about 1.3 million people will benefit.

The programme also includes sub-projects that specifically target improved sanitation, which receive support from the Bill & Melinda Gates Foundation. “Citywide Inclusive Sanitation” principles will be integrated into the planning, design, implementation, operation, and maintenance of the respective sanitation subprojects.

“The project will improve livability in selected cities with provision of universal access to basic water and sanitation services for the residents,” said Additional Secretary (Fund Bank and ADB) in Department of Economic Affairs, Union Finance Ministry, Sameer Kumar Khare.

“This is aligned to the vision of the Government of Madhya Pradesh to improve urban infrastructure services with universal coverage of piped water supply in all urban local bodies by 2025″.

The project will pilot an integrated urban development approach to improve urban service delivery and infrastructure of two urban local bodies. ADB’s technical support will provide a significant model that can be used to replicate and scale up the enhancement of urban livability in other localities.

“Through this project, ADB will continue innovative approaches and good practices of the ongoing project including universal coverage with 100% household metering, full operation and maintenance cost recovery, and reducing nonrevenue water,” said Country Director of ADB for India Takeo Konishi.

“The provision of inclusive water and sanitation services to the urban poor will help achieve Sustainable Development Goal 6 or access to clean water and sanitation for all”, said Konishi.

The Rajasthan project is expected to build citywide access for improved water supply services for around 570,000 people and enhanced sanitation services for about 720,000 people in at least 14 secondary towns. These localities have 20,000–100,000 residents.

“Partnership with ADB helps ensure a longer-term policy dialogue on deepening financial sustainability and institutional strengthening, particularly in local governments, and introduces new good practices,” said ADB Senior Urban Development Specialist for South Asia Na Won Kim. 

“Specifically, ADB will help ensure that the project incorporates practical lessons and innovations. The use of smart technologies and a cost-effective system are the key innovative features that could be widely replicated in other cities in Rajasthan and beyond.”

Through the project, water supply systems in at least eight project towns are expected to improve by 2027, with about 100,000 households including all urban poor households, benefiting from five new or rehabilitated water treatment plants and 1,350 kilometers of distribution networks. 

Also, citywide sanitation systems based on the most cost-effective solutions will be developed.

The project will build on three earlier related projects and sector reforms funded by ADB in Rajasthan. 

Since 2000, the government has implemented two multi-sector urban investment projects supported by ADB, benefiting more than 7 million people in 21 cities. The third project, Rajasthan Urban Sector Development Program, implements water supply and sanitation investments in six major cities.

The project will also strengthen the institutional capacity of the local governments and the Rajasthan Urban Drinking Water, Sewerage, and Infrastructure Corporation Limited, a corporate entity established with ADB’s technical support. The project will provide enhanced support to women and vulnerable groups through skills training, paid internships, and community engagement and awareness activities.