India, World Bank signs $400 million loan for Namami Gange rejuvenation

New Delhi, July 08: India and World Bank signed a $400 million loan agreement to enhance support for the ‘Namami Gange’ program that seeks to rejuvenate the Ganga river. The $400 million deal consists a loan of $381 million and a proposed Guarantee of up to $19 million.

 

 

The agreement for the $381 million loan was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of Indian government and Qaiser Khan, Acting Country Director (India), on behalf of the World Bank. Calling the Ganga India’s most important cultural, economic, and environmental resource, Khare stated that the program seeks to ensure that the river returns to a pollution-free, ecologically healthy state.

 

The $400 million operation includes a proposed Guarantee of up to $19 million to backstop the government’s payment obligations for three Hybrid-Annuity-Model Public-Private Partnership (HAM-PPP) investments on the Ganga’s tributaries. “This is the first-ever IBRD Guarantee for wastewater treatment and the first IBRD Guarantee in the water sector in India and is expected to help free up public resources in the current economic situation,” said Satheesh Sundararajan, Senior Infrastructure Financing Specialist and co-TTL for the Guarantee.

 

The $381 million variable spread loan has a maturity of 18.5 years including a grace period of 5 years. The $19 million Guarantee Expiry Date will be 18 years from the Guarantee Effectiveness Date. The bank has been supporting the government’s efforts since 2011 through the ongoing National Ganga River Basin Project, which helped set up the National Mission for Clean Ganga (NMCG) as the nodal agency to manage the river, and financed sewage treatment infrastructure in several riverside towns and cities.

 

The Second National Ganga River Basin Project will help stem pollution in the iconic river and strengthen the management of the river basin which is home to more than 500 million people. Rajiv Ranjan Mishra, Director General of the National Mission for Clean Ganga said that the continuity provided by this project will consolidate the momentum achieved under the first World Bank project, and help NMCG introduce further innovations, and benchmark its initiatives against global best practices in river rejuvenation.

 

“The government’s Namami Gange Program has revitalized India’s efforts to rejuvenate the Ganga. The first World Bank project helped build critical sewage infrastructure in 20 pollution hotspots along the river, and this Project will help scale this up to the tributaries. It will also help the government strengthen the institutions needed to manage a river basin as large and complex as the Ganga Basin,” said Junaid Ahmad, World Bank Country Director in India.

 

The basin provides one-third of India’s surface water, including the country’s largest irrigated area, and is key to India’s water and food security. Over 40 percent of India’s GDP is generated in the densely populated Basin. However, the river is today is facing pressures from human and economic activity that impact its water quality and flows.