Hyderabad: The International Bank for Reconstruction and Development is proposing to give a loan of $435 million for reforming irrigation service delivery and management in Nagarjuna Sagar Scheme.

The loan will go a long way in enabling a long-term thorough reform of the water sector in Andhra Pradesh. The proposed project (pegged at $485 million) is expected to be the first operation of a long-term (12-18 years) engagement and partnership with Andhra Pradesh on water sector reform, the World Bank proposal said.

Besides funding the Nagarjuna Sagar Scheme, the Andhra Pradesh Water Sector Improvement Project would also support water sector institutional restructuring and capacity building activities. The project would include pilots on user-centric aquifer level ground water management and water efficient technologies.

The State Government is expected to put in $40 million for the project, the beneficiaries would contribute $10 million.

The Nagarjuna Sagar Scheme would get a major portion (91.5 per cent) of the total funds, the proposal said. This comprises six major components that envisaged active participation of water users associations in modernisation of the irrigation system. The project is aimed at strengthening and building capacities of these associations at all levels of the Nagarjuna Sagar Scheme system.

Implementation of improved water management practices — such as benchmarking, administration of water entitlements and bulk supply of water to users — is one of the components of the project.