ADB approves US$400 million loan to enhance urban services in India

New Delhi, India (Urban Transport News): In a recent announcement, the Asian Development Bank (ADB) has sanctioned a $400 million policy-based loan to India for the second phase of the Sustainable Urban Development and Service Delivery Program. This initiative is aligned with the Indian government's urban reform agenda, aiming to elevate the standard of living in urban areas by implementing robust urban infrastructure, ensuring reliable public services, and establishing efficient governance systems. While the first phase, initiated in 2021, concentrated on formulating national-level policies and guidelines for enhancing urban services, the second phase focuses on facilitating investment planning and reform measures at the state and urban local body (ULB) levels.

According to ADB Principal Urban Development Specialist, Sanjay Joshi, India acknowledges the potential of cities as economic hubs and emphasizes the imperative need to create livable urban spaces characterized by inclusivity, resilience, and sustainability in infrastructure, which also aligns with ADB Strategy 2030. The national flagship program, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, aims to ensure universal access to water supply and sanitation and guarantee urban water security by reducing water losses, reusing treated sewage for non-domestic purposes, restoring water bodies, and maintaining sustainable groundwater levels.

The program envisions comprehensive urban planning reforms to regulate urban expansion and promote systematic and planned urbanization through the enhancement of legal, regulatory, and institutional frameworks, along with capacity building for ULBs and community awareness. Specifically, ULBs will drive the modernization of building regulations, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development, thereby facilitating the evolution of cities into well-organized centers of economic growth. Integrated planning processes will integrate climate and disaster resilience, encourage nature-based solutions, enhance the urban environment, and fortify cities' financial sustainability by generating additional revenues.

Furthermore, cities will be encouraged to attain creditworthiness through various reforms that enhance their revenue streams such as property taxes and user charges, streamline their operations, and rationalize their expenses. These measures are expected to enable cities to leverage innovative financing methods such as commercial borrowings, municipal bond issuances, sub-sovereign debts, and public-private partnerships to bridge the substantial gap in urban infrastructure investments.

ADB remains committed to providing knowledge and advisory assistance to the Ministry of Housing and Urban Affairs during the implementation of the program, including monitoring and evaluation. ADB's focus will be on supporting lower-income states, facilitating capacity building, strengthening institutions, and implementing policy reforms.

Established in 1966, ADB is dedicated to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while continuing its efforts to eliminate extreme poverty. With 68 member countries, including 49 from the region, ADB stands as a prominent financial institution committed to the development and prosperity of the region.