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NDB approves $100 mn loan for Rajasthan water project

New Delhi : The Shanghai-based New Development Bank (NDB), formerly referred to as the BRICS Development Bank, has approved a $100 million loan for India for a major water project in Rajasthan.

The loan agreement for financing of Rajasthan Water Sector Restructuring Project for Desert Areas was signed between the Indian Government and the New Development Bank recently in New Delhi. This is the first tranche loan of $100 million approved by the NDB under the multi-tranche financing facility of $345 million for this project.

The Bank's board of directors had approved in November last year a sovereign multi-tranche financing facility of up to $345 million to the Indian Government. The facility will be used by the Indian Government for on-lending to Rajasthan for rehabilitating the Indira Gandhi canal system.

The objective of the project is to rehabilitate the 678-km 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 project benefits include arresting 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.

The project is also expected to strengthen the drinking water supply and irrigation facilities in the area.

The Rajasthan Government will implement the project through its water resources department. The project implementation period is six years.

The NDB was established by Brazil, Russia, India, China and South Africa (BRICS) to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

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