WB to provide $5 bn loan for urban development

Evincing interest to participate in India’s urban development process, multilateral lending agency World Bank has initiated a dialogue with the urban development ministry to provide a loan assistance of $5 billion to develop Indian cities, a top official said.

“It is the for the first time that country director of World Bank has come forward and initiated a dialogue to provide $5 billion loan assistance, the modalities of which will be finalised by February 2010 before the budget,” ministry of urban development secretary M Ramachandran told reporters here.

“The funds will be released under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) channel. Out of the $5 billion, $3.5 billion will be for infrastructure development and $1.5 billion for development of urban transport,” Ramachandran said.

He said one third of the Rs 61,000 crore JNNURM fund had already been released to the states where projects are under various stages of implementation, though there had been some delay in release of funds due to election process and budgeting by the various local bodies. Further, he said as per the package for procurement of buses by states/UTs under the JNNURM, 15,000 buses costing Rs 4,000 crore (of which half will be funded by Centre, 35 per cent by state and 15 per cent by local bodies) will be released in 60 cities in the next three months.