India signs second loan agreement with New Development Bank

India has signed a second agreement with New Development Bank for a $100 million loan facility for Rajasthan Water Sector Restructuring Project for Desert Areas.

This is the first tranche of a $345 million loan extended by the NDB under the multi-tranche financing facility for the project.

The loan agreement was signed between the government of India and the New Development Bank (NDB) on 13 February 2018 at New Delhi.

The project aims at rehabilitating the 678km long Indira Gandhi Canal system built during 1958-63 to prevent seepage, conserve water, and enhance water use efficiency as mandated by both national and state level policies on water use. The execution of the project would multiple benefits such as:

  • Arresting the seepage by rehabilitating the deteriorating canal lining of the Indira Gandhi Nahar Project (IGNP) which needs urgent attention;
  • Rehabilitation of waterlogged areas;
  • Modernisation and optimisation of the irrigation management practices in the project area by involvement of the water users' associations (WUA) in the command area; and
  • Strengthening of drinking water supply and irrigation facilities in the project area.

The project implementation period is six years. The government of Rajasthan will implement the project primarily through Rajasthan Water Resources Department.

The representatives of the government of India, NDB and the government of Rajasthan also signed Facility Framework Agreement under which NDB has agreed to provide Multi-Tranche Financing Facility for amount aggregating to 345 million to the Republic of India for this project.