ADB to loan US$200mn for rural roads in Maharashtra

The Asian Development Bank (ADB) and the Central Government signed a US$200-million loan agreement on 9th September to boost rural connectivity in Maharashtra.

September 9, 2019

The project will upgrade 2,100 km of rural roads to all-weather standards, with climate resilience and safety features

Accompanying the loan deal is a technical assistance grant of $1 million for institutional strengthening of the MRRDA

Enhanced road connectivity and better access to markets will help farmers increase agricultural productivity and incomes

Improving rural connectivity is one of the key priorities of the Government of India, core to economic empowerment

The Asian Development Bank (ADB) and the Central Government signed a US$200-million loan agreement on September 9 to boost rural connectivity in Maharashtra. Sameer Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, and Sabyasachi Mitra, Deputy Country Director of ADB’s India Resident Mission signed the agreement for the Maharashtra Rural Connectivity Improvement Project. Accompanying the loan agreement is a technical assistance grant of $1 million for institutional strengthening of the MRRDA for road asset management, road safety, climate-resilient design and construction and web-based real-time project monitoring.

Mr. Khare said that enhanced road connectivity and better access to markets will help farmers increase agricultural productivity and incomes. The project is expected to improve the condition of about 2,100 km of rural roads to all-weather standards, with climate resilience and safety features. Maharashtra has an extensive road network, with rural roads making up two-thirds of it. However, more than half of these rural roads are unsealed, making them unsuitable for motorized traffic and impassable during the rainy season. The government, therefore, is actively taking up infrastructure projects to make roads safer and bring about development in surrounding districts. 

Improving rural connectivity is one of the key priorities of the Government of India. The Union Budget 2019 has given a massive push to infrastructure and connectivity. Projects such as industrial corridors, DFC, Bharatmala, Sagarmala and UDAN schemes will continue to improve connectivity and increase competitiveness. Meanwhile, the recent agreement with ADB is a step forward for the same. Earlier in June, the bank has also given preliminary nod for the funding of five rail projects around India, including a rapid rail corridor as well as four metro rail projects, including the Mumbai metro. ADB is also helping MMRDA improve last-mile connectivity by piloting electric vehicles and non-motorized transport at stations.  

The ADB has indicated that India will receive sovereign loans worth more than US$3 billion during 2019 for development and infrastructure projects.  

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