Asian Development Bank (ADB) and government of India have signed a $74.8 million loan to improve connectivity with the North eastern region.

The loan constitutes the first tranche of the North Eastern State Roads Investment Program, a $200 million multi-tranche finance facility (MFF), expected to be executed in two tranches. Under the facility, a total of 433.7 km roads would be improved/upgraded/ constructed in six states- Assam, Manipur, Meghalaya, Mizoram, Sikkim and Tripura.

This will be ADB’s first Transport sector project in NE region to develop and implement road investments that follow widely-recognized best practices in engineering design, pre-construction activities and project management.

The program envisages enhanced and Information Technology based capacity development of the state implementing agencies/PWDs for improved road asset management, planning and project management.

A road safety programme has also been incorporated with coordinated engineering, enforcement and education components.

The 1st tranche, which was signed, will improve around 200 kilometers of road in the isolated states of Assam, Meghalaya and Sikkim. Improvements will include widening of existing sections of roads, strengthening pavements, raising embankments, and providing permanent structures at river crossings.

The signatories to the loan were Venu Rajamony, joint secretary (Multilateral Institutions), department of Economic Affairs, ministry of Finance, on behalf of government of India; and Hun Kim, Country director for India, on behalf of Asian Development Bank .

The project agreements were signed by P.R. Meshram, director in the Ministry of Development of North Eastern Region (DoNER) and commissioners and secretaries of the states of Assam, Meghalaya and Sikkim.

The 1st tranche loan of US$ 74.8 million from Asian Development Bank makes up to 68% of the total 1st tranche project cost of US$ 109.8 million, with the central and state governments providing counterpart finance of $35 million.

The project is expected to be completed by December, 2016. DoNER is the National Executing Agency for the program.
This loan from the ordinary capital resources of ADB has a 25-year term, including a grace period of 5 years, commitment charges of 0.15% and interest rate in accordance with ADB’s LIBOR-based lending facility.