New loan sanctioned for better water supply in Bihar

Patna, February 23: Bihar’s water supply is about to get a major boost as Centre has signed a $84 million loan with the Asian Development Bank (ADB) on Friday for improvement and expansion of water supply in Bhagalpur and Gaya towns in the state.

“The Project 2 will improve access to better quality and sustainable water supply, for the people of Bhagalpur and Gaya towns. It will also promote better water management practices that will result in a citywide coverage with 24-hour uninterrupted supply of treated water of 135 litres per capita per day in both cities,” said Sameer Kumar Khare, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, who signed the loan agreement for Government of India.

“The loan finances will support civil works subprojects and would benefit 1.1 million people in the two project towns with increased coverage of treated water supply by 2021; train 400 urban local body (ULB) staff in the management and operation and maintenance (O&M) of water supply systems, and help ULBs improve technical and financial management of the water supply operations,” s Kenichi Yokoyama, Country Director of ADB’s India Resident Mission who signed the agreement for ADB.

The two towns under the project would achieve the national urban service goals or match many of the national averages for urban service delivery performance in India. The investment program will assist ULBs in designing affordable tariffs for O&M cost recovery.

The loan will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s lending facility based on the London interbank offered rate (LIBOR), and a commitment charge of 0.15% per year.