OREANDA-NEWS. The Asian Development Bank (ADB) and the Government of India have signed two loans worth \\$500 million to help the Government of Rajasthan better manage essential urban services and finance water supply and wastewater upgrades.

The signing of Rajasthan Urban Sector Development program marks the first occasion for ADB to couple a policy loan to support urban sector reforms with a project loan to improve urban services over the long term. 

“Rajasthan is urbanizing rapidly. The program aims to strengthen urban institutions in Rajasthan to improve their governance, and better manage urban services. It also aims at boosting the water supply in five cities from 2 hours per day to 24-hour supply, and increasing collection and treatment of sewage and septage waste,” said M. Teresa Kho, Country Director for ADB in India, who signed the loan agreement on behalf of ADB. 

“The Sector Development Program modality will support both the infrastructure needs and the reform program. The policy-based loan will provide financial support to the state government to implement reforms that will help municipal bodies, individual households and private sector investors. The project loan will support investments to improving urban services in six cities with provision of long-term operation and maintenance embedded construction contracts for nonrevenue water which is an innovative mechanism,” said Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs in the Ministry of Finance who signed the agreement for Government of India. Manjit Singh, Principal Secretary, Local Self Government, signed the loan agreement on behalf of the Government of Rajasthan. 

The \\$250 million policy loan will be used to help the Government of Rajasthan finance the creation of a corporate–style state body to promote urban services development and an independent utility in Jaipur to oversee water and wastewater operations in the state capital. 

Meanwhile, the \\$250 million project loan will support water system improvements in five cities— Hanumangarh, Jhunjhunu, Pali, Sri Ganganagar, and Tonk—which currently have low piped water coverage and high water losses. These upgrades will include nearly 200,000 new house connections with proper metering to cut water losses.

Moreover, in those five cities, plus Bhilwara, sewage pipes and treatment plants will be upgraded, wastewater recycling schemes put in places, and sludge will be used to generate electricity.
    
ADB will also provide a \\$1 million grant from its Technical Assistance Special Fund to finance capacity building in state urban institutions. Another \\$2 million grant from the Sanitation Financing Partnership Trust Fund, supported by the Bill and Melinda Gates Foundation, will finance innovative sanitation improvements, including septage management and decentralized wastewater treatment, in non-sewered areas for low-income households in two cities.
     
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled \\$22.9 billion, including cofinancing of \\$9.2 billion.