India, ADB sign USD 110 million loan agreement to improve rural connectivity in Madhya Pradesh

India and Asian Development Bank (ADB) on October 5, 2018 signed a USD 110 million loan agreement to upgrade the 2800 kilometers all-weather rural roads in Madhya Pradesh under the Prime Minister's Rural Roads Program (PMGSY).

This agreement under the Second Rural Connectivity lnvestment Programme was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs in the Union Ministry of Finance; and Kenichi Yokoyama, Country Director of ADB's India Resident Mission.

Highlights of the loan agreement

• This loan agreement is the tranche 2 of the USD 500 million Second Rural Connectivity investment Programme for India that was approved by the ADB Board in December 2017.

• The tranche 2 of the project will provide continued assistance to the PMGSY by upgrading rural roads in Madhya Pradesh that will support the Government's long term goal to achieve inclusive economic growth in rural India.

• The loan will improve mobility for self-employment and livelihood opportunities in rural areas by improving access to district centers.

• It will continue to support 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.

• Considering the increased rainfall and storm surges in Madhya Pradesh, the road designs take into account the climate risks with measures such as greater elevation of road embankments and slope protection.

• Women were extensively consulted during the project design and will gain some key benefits, including improved access to healthcare, livelihoods and schooling.

Background

• The overall Second Rural Connectivity lnvestment Programme is aimed at improving rural connectivity, facilitating safer and more efficient access to livelihood and socio-economic opportunities for rural communities.

• It involves improvement of about 12,000 kilometers rural roads across the states of Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal.

• The tranche 1 loan of USD 250 million is currently under implementation in the 5 project states, upgrading over 6,000 km of rural roads.

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