ADB to support rural agriculture in Maharashtra through RBL led loan pact with GOI

Amounting to US$ 346mn, the loan pact will allow for the strengthening of existing rural agricultural infrastructure in Maharashtra

October 20, 2020

The loan will be disbursed on Results-based Lending modality (RBL) and not the expense based model.

Extension lines for 46,800 kms are to be laid and new Distribution Substations are to be set-up.

The procurement of quality agricultural machinery and setting up of a High Voltage Distribution System are expected outcomes.

A previous ADB collaboration includes the creation of a 9,000 MW transmission link in the CKIC corridor in Tamil Nadu.

A US$ 346mn loan pact with a two year period has been jointly signed by the Government of India and the Asian Development Bank (ADB) to further rural agricultural progress in the state of Maharashtra. This first-of-its-kind loan shall be disbursed under the Results-based Lending modality (RBL) as opposed to the conventional expenditure-based model of loan disbursement. With an end-to-end focus, the programme will put in place investment mechanisms for the procurement of quality agricultural machinery and set up a High Voltage Distribution System in collaboration with the Maharashtra State Electricity Distribution Company Limited (MSEDCL). New distribution substations and the laying of extension lines amounting to 46,800 kms are to be facilitated. Takeo Konishi, Country Director of ADB’s India Resident Mission and Sh Sameer Kumar Khare,Additional Secretary,Department of Economic Affairs were the signatories of the loan pact.

The Asian Development Bank had partnered with the Government of India in 2019 to enhance power supply in Tamil Nadu through the Chennai–Kanyakumari Industrial Corridor (CKIC). A 9,000 MW transmission link was laid between the towns of Coimbatore and Virudhunagar  to support the industrial regions and promote the creation of new power plants further south. The generation of renewable energy assets has been a priority for the Government of India. Prime Minister Modi outlined a national renewable energy target of 450 GW during the United Nations’ Climate Action Summit 2019. Sustainable sources of energy, specifically hydropower energy, are being developed by the nation. With 2030 as the target year, 21 GW worth of renewable energy plants are to be developed within the nation. The IEA highlights that constraints on the availability of water resources pose a challenge that will need to be dealt with so as to equip the nation with sustainable energy. The levying of a nominal 5% GST on the creation of renewable energy machinery and assets gives the sector impetus to accelerate the proliferation of renewable energy. 

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