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ADB to give $275 mn loan for MP water supply projects

New Delhi : The Asian Development Bank (ADB) will provide a $275 million loan for a project that aims to improve urban water supply services in Madhya Pradesh.

The project aims to construct climate-resilient water supply facilities — raw water intakes, water treatment plants, overhead tanks, and distribution networks with metered household connections — to benefit about 300,000 households in 64 small towns in the state. It will run for almost five years with an expected completion date of June 2022.

Besides the sustainable and inclusive water supply infrastructure, the project will also enable the construction of sewage and storm water management systems in tourist towns of Khajuraho and Rajnagar, while strengthening local authorities’ project implementation capacity.

The contracts to construct the facilities will be under a design-build-operate (DBO) model that require contractors to not only develop high-quality infrastructure but also efficient operations of the facilities through a long-term performance-based contract.

The project will support local authorities in maintaining these 10-year operation and maintenance contracts.

Madhya Pradesh, the second-largest state in the country in terms of geographical area, has a population of about 73 million. The state is undergoing rapid urbanisation and the proportion of its urban population is expected to increase from 28 per cent in 2016 to 35 per cent by 2026.

“Madhya Pradesh needs substantial investments to keep pace with its rapid urbanization and continuous water supply is vital for improving living standards and enhancing economic growth. Sustainable piped water supply will foster inclusiveness by giving more of the state’s population easier access to basic services, especially for women and girls.” said Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Union Finance Ministry Raj Kumar.

The project supports the State Government’s priority to develop urban infrastructure. Previous ADB urban investments in the state have improved access to safe drinking water for more than five million residents in four major cities.

Along with ADB’s loan, the Madhya Pradesh Government will provide counterpart support of $124 million.

“ADB’s continued support to the state’s urban development, through this project, will improve further the quality, coverage, efficiency, and sustainability of urban service delivery, stabilize and deepen institutional capacity, and improve long term water service management,” said Deputy Country Director of ADB’s India Resident Mission LB Sondjaja.

“A key element of the project is the use of design-build-operate contracts including 10-years operation and maintenance to ensure better sustainability of the water service operation and financial viability", he added.

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