In order to improve railway infrastructure, Asian Development Bank (ADB) will provide $130 million loan to India.

New Delhi, Feb 18/Nationalturk – The Asian Development Bank (ADB) will provide $130 million loan to India for improvement in railway infrastructure in the country.

“The Government of India and ADB signed yesterday a $130 million loan to help India improve rail services along some of its busiest and most critical freight and passenger transport routes,” an Indian government spokesman said.

He said the signatories to the loan were Nilaya Mitash, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of India and Ms. M. Teresa Kho, Country Director (INRM), on behalf of ADB.

The spokesman said the second tranche loan is part of the $500 million Railway Sector Investment Program approved by ADB in 2011, and will finance track components for 840 kilometers of additional tracks along existing railway lines.

‘ADB investment targets busy freight and passenger routes’

The ADB investment program targets busy freight and passenger routes in the states of Chhattisgarh, Orissa, Maharashtra, Karnataka and Andhra Pradesh, including the critical ‘Golden Quadrilateral’ corridor that connects Chennai with Mumbai.

Many of the lines traverse through impoverished rural areas and carry large number of passengers and huge quantities of minerals and other economically important freight.

M. Teresa Kho, Country Director of ADB’s India Resident Mission said the improvements in rail infrastructure will help deliver more energy efficient, safe, reliable, and environmentally-friendly rail services along key high-density routes.

‘Economic opportunities for about 21 million people’

“This will result in direct and indirect economic opportunities for about 21 million people in program areas who will benefit from faster travel times, lower costs, and improved links to markets, production centers, and social service facilities,” she said.

The Indian official spokesman said the second tranche from the ordinary capital resources of ADB has a 25-year term including a grace period of 5 years, commitment charge of 0.15% per year (on un-drawn balance), Maturity Premium of 0.10% (by straight line method)and interest rate to be determined in accordance with ADB’s LIBOR-based lending facility.

“India will provide counterpart finance of more than $97.2 million to cover the balance of the costs of the second tranche which is estimated at more than $227.2 million. Indian Railway Ministry carries out the program which is due for completion by December 2018,” he added.

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