ADB, India Sign $346 Million Loan to Improve State Highways in Karnataka

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The Asian Development Bank (ADB) and the Government of India today signed a $346 million loan to finance improvement of over 400 kilometers (km) of state highways that will enhance connectivity and access to economic centers across 12 districts in Karnataka.

The signatories to the loan agreement for the Karnataka State Highways Improvement III Project (KSHIP-III) were Mr. Sameer Kumar Khare, Joint Secretary (Fund Bank and ADB), Department of Economic Affairs in the Ministry of Finance, who signed on behalf of the Government of India, and Mr. Kenichi Yokoyama, ADB Country Director in India, who signed for ADB.

Karnataka needs substantial infrastructure investments to sustain high economic growth and meet its development needs, said Mr. Khare after signing the loan agreement. State highways are a key link to population and economic centers, and continued development of the state highway network in Karnataka will foster inclusiveness and sustain economic activities.

An ongoing road improvement project financed by ADB with a loan of $315 million is upgrading about 615 km of state roads.

The new loan will continue ADB support to the Government of Karnataka's state-wide road improvement program, and will also help stabilize and deepen institutional capacity, and improve road safety, said Mr. Yokoyama. A key element of the project is the use of hybrid annuity contracts to improve road asset quality and sustainability.

This KSHIP-III project will upgrade about 419 km of state highways to two and four lanes with paved shoulders, and will reconstruct, widen, and strengthen culverts and bridges. The project features the use of hybrid-annuity contracts to increase the participation of the private sector and improve the quality and sustainability of road assets with performance-based maintenance period of 7 years, post-construction.

The project will also carry out a road safety audit to identify and mitigate critical accident blackspots across the state highway network and strengthen the institutional capacity of the Karnataka Public Works, Ports, and Inland Water Transport Department.

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 67 members�48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

Source: Asian Development Bank