India, NDB sign US$100m water project funding

The loan from the New Development Bank (NDB), formerly the BRICS Development Bank, will help finance the Rajasthan Water Sector Restructuring Project for desert areas

February 13, 2018

The US$100 million funding is the first tranche loan approved by the NDB under the multi-tranche financing facility of US$345 million for the rajasthan water infrastructure project.

The project will rehabilitate the 678 km-long Indira Gandhi canal system built during 1958-63 to prevent seepage, conserve water, while enhancing water use efficiency by over 10 per cent.

The NDB, which is supported by the BRICS member states - Brazil, Russia, India, China and South Africa, is currently supporting three other projects in India with grants of over US$1 billion.

The three other projects include construction of 500 MW of renewable energy capacity, upgrading of 1,500 km of major district roads in the state of Madhya Pradesh; and a project concerning water supply and sanitation and benefiting 3,400 villages and over 3 million people.

The Indian Government and the New Development Bank (NDB), formerly the BRICS Development Bank, entered into an agreement on February 13th to finance a water project in the state of Rajasthan. The NDB, which is supported by the BRICS member states – Brazil, Russia, India, China and South Africa, will contribute US$100 million towards the Rajasthan Water Sector Restructuring Project for the desert areas. This is the first tranche loan approved by the NDB under the multi-tranche financing facility of US$345 million for this project. The project will rehabilitate the 678 km-long Indira Gandhi canal system built during 1958-63 to prevent seepage, conserve water, and enhance water use efficiency.

The project is of critical importance to the western state of Rajasthan, which experiences harsh and long summer.  The project’s benefits include: (I) Arresting seepage by rehabilitating the deteriorating canal lining of the Indira Gandhi Nahar Project; (II) Rehabilitation of waterlogged areas; (III) Modernisation and optimisation of the irrigation management practices in the project area by involving the water users’ associations in the command area; (IV) Strengthening of drinking water supply and irrigation facilities in the project area. The work on these projects will span six years with the State Government of Rajasthan implementing the project primarily through the Rajasthan Water Resources Department.

A successful completion of the project will provide an additional 1.3 million acre feet of water for land cultivation, while rehabilitating 33,312 hectares of water-logged area for cultivation. These measures will improve water use efficiency by 10 per cent. Apart from the Rajasthan water project, NDB is currently supporting three other projects in India with grant totalling over US$1 billion. These projects are: construction of 500 MW of renewable energy capacity; upgrading of 1,500 km of major district roads in the state of Madhya Pradesh; and a project concerning water supply and sanitation as well as development of more than 3,400 villages and over 3 million rural population in Madhya Pradesh.