ADB, Indian govt enter new financing deals

The latest agreements between ADB and the Indian Government include funding for a water and sanitation project in Tamil Nadu, a power transmission project in Himachal Pradesh as well as support for India Infrastructure Finance Co Ltd

November 16, 2018

Around 4 million people will benefit from piped water and sewerage connections and improved drainage in Tamil Nadu

ADB’s operations totaled US$32.2 billion in 2017, including US$11.9 billion in co-financing; The bank is owned by 67 entities

In Tamil Nadu, ADB will provide US$169 million as the first tranche of a US$500 million financing for projects in at 10 cities

In Himachal Pradesh, ADB will provide US$105 million for transmission upgrades for increased hydropower supply

Asian Development Bank (ADB) and Government of India have signed a host of new funding agreements, as per an official announcement on November 16. The latest loan deals include financing for a water and sanitation project in Tamil Nadu, a power transmission project in Himachal Pradesh as well as support for India Infrastructure Finance Co Ltd. The agreements come a month after the Philippines-based regional development bank signed multiple other agreements in India. Currently, ADB supports over 30 projects in India, a vital contributor to India’s infrastructure development initiatives.

In Tamil Nadu, ADB will provide US$169 million loan as the first tranche of a US$500 million financing to develop climate-resilient water supply, sewerage, and drainage infrastructure in at least 10 cities. The projects will help the state face recurring droughts and erratic monsoons that have led to severe water scarcity and urban flooding. The ADB funding programme forms a part of its support to the state’s Vision Tamil Nadu 2023 initiative that aims to provide universal access to water and sanitation and to develop world-class cities in high-performing industrial corridors, boosting economy.

In Himachal Pradesh, ADB will provide US$105 million financing to continue financing the transmission system upgrades in Himachal Pradesh for increased supply of hydropower to the state and the national grid. The tranche 3 loan is part of the US$350 million multi-tranche financing facility (MFF) for Himachal Pradesh Clean Energy Transmission Investment Program approved by the ADB Board in September 2011. The program is aimed at developing and expanding transmission network to move clean and renewable power generated in the state to load centers within and outside the State.

In New Delhi, ADB will provide US$300 million to support lending by India Infrastructure Finance Co Ltd (IIFCL). IIFCL provides long term debt for infrastructure projects. The latest funding will boost availability of long-term finance for PPP projects, improve operational capacity of IIFCL, and expand the portfolio of infrastructure financing instruments available to IIFCL. ADB funding is expected to support at least 13 sub-projects through IIFCL, involving roads and renewable power generation, under the last tranche. The loan is expected to help catalyze the closing of US$2.4 billion in investments.