ADB to loan US$91m for water project in Karnataka

Government of India and the Asian Development Bank (ADB) have entered a US$91-million loan agreement to fund two projects that will improve irrigation water usage and aid sustainable water consumption in Karnataka

November 18, 2019

The first project will modernize irrigation systems, preparing new water resources policy and improving water governance

The second project will empower institutions under integrated water resources management initiative in Karnataka

Improved irrigation efficiency coming out of the project is expected to generate water savings of 1.7 billion cubic meters

Annual farm incomes anticipated to rise by up to 50 per cent for marginal households due to increased crop production

Government of India and the Asian Development Bank (ADB) signed a US$91 million loan agreement on November 18 to improve irrigation water usage efficiency as well as non-agricultural water sustainability in Karnataka over two projects. The loan will support the modernization of irrigation systems in the Vijayanagara channel and contribute towards preparing river basin management plans for the Krishna river, as per a Ministry of Finance statement.

The two project loans will support Karnataka’s water agencies in the creation and implementation of better management plans for select irrigation systems. The first part of the project loan focuses on the modernization of the Gondi irrigation system, preparing a new water resources policy for the state, and bolstering initiatives regarding water governance. The second project loan focuses on the Karnataka Integrated and Sustainable Water Resources Management (IWRM) investment program. 

The loan agreement was signed between Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, and Kenichi Yokoyama, Country Director of ADB’s India Resident Mission. Along with strengthening institutions under IWRM, the loan will finance the modernization of Vijayanagara channels and upgradation of about 442 km of canals.

Apart from infrastructure development, the investment will improve water usage efficiency and availability in the agriculture sector. An improvement in irrigation efficiency could potentially generate water savings of 1.7 billion cubic meters, to be better utilised on an additional 160,000 hectares of farmland. Through an increase in crop production, annual farm incomes are projected to rise by 50 per cent, which would improve the lives of over 1.5 million people. 

ADB has previously indicated that India will receive sovereign loans worth over US$3 billion in 2019, with an initial prioritisation of transportation and logistics. This latest investment into water security showcases the growth of the partnership, and its expansion to include other projects for infrastructure development.

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