$400 Million ADB Loan to Help Improve Urban Services in India

MANILA, PHILIPPINES (24 October 2023) — The Asian Development Bank (ADB) has approved a $400 million policy-based loan to India for Subprogram 2 of the Sustainable Urban Development and Service Delivery Program.

The program aims to support the government’s urban reform agenda for improving the quality of urban life through the creation of high-quality urban infrastructure, assured public services, and efficient governance systems. While Subprogram 1 approved in 2021 established national-level policies and guidelines to improve urban services, Subprogram 2 is supporting investment planning and reform actions at the state and urban local body (ULB) levels. 

“India has recognized the potential for cities to be centers of economic growth and has emphasized the need to make cities livable through inclusive, resilient, and sustainable infrastructure, which is also in line with ADB Strategy 2030,” said ADB Principal Urban Development Specialist Sanjay Joshi. “The national flagship program of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 is targeted for universal access of water supply and sanitation and to ensure urban water security through reducing water losses, recycling treated sewage for non-domestic use, rejuvenation of water bodies, and maintaining sustainable ground water levels.”

The program also envisages integrated urban planning reforms to control urban sprawls and foster systemic and planned urbanization through enhancing the entire ecosystem of legal, regulatory, and institutional reforms along with capacity building of ULBs and community awareness. Specifically, ULBs will promote modernization of building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development to help cities become well-planned centers of economic growth. Such integrated planning processes will incorporate climate and disaster resilience, promote nature-based solutions, improve urban environment, and improve cities’ financial sustainability through generation of additional revenues.

Moreover, cities will be incentivized to become creditworthy through various reforms on enhancing their revenues such as property taxes and user charges, improve their efficiencies and rationalize their expenditures. This will substantially help cities mobilize innovative financing such as commercial borrowings, issuance of municipal bonds, subsovereign debts, and public–private partnerships to bridge significant deficit in urban infrastructure investments.    

ADB will continue to provide knowledge and advisory support to the Ministry of Housing and Urban Affairs in program implementation, including monitoring and evaluation. ADB will focus on lower-income states, which require support in capacity building, institutional strengthening, and policy reforms. 

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.