Guwahati, Saturday, March 10, 2012
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$81-million ADB loan for State urban infrastructure
Kalyan Barooah
 NEW DELHI, March 9 – A tripartite agreement among Asian Development Bank (ADB), Centre and Government of Assam was signed for USD 81 million loan agreement for Tranche 1 of Assam Urban Infrastructure Investment Program for upgrade of wastewater treatment and urban transport benefitting an estimated 3.5 lakh residents of Guwahati city.

Assam Urban Infrastructure Investment Program (AUIIP) envisages supply of clean piped water to residents of Guwahati and upgrade wastewater treatment and urban transport in Dibrugarh, besides upgrade of solid waste management and drainage infrastructure.

The signatories were Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, Venu Rajamony signed on behalf of Government of India, ADB Country Director for India, Hun Kim, while Commissioner and Secretary, Guwahati Development Authority, Dr. Ashish Kumar Bhutani, signed on behalf of Government of Assam.

ADB said USD 200 million multi-tranche financing facility is to help Government of Assam with long-term funding for urban development.

The urban transport component of the first tranche of USD81 million includes development of a 10-kilometer rapid transit corridor for buses in Guwahati, which is expected to serve more than 40,000 people daily, shorten travel time and cut greenhouse gas emissions.

In Dibrugarh, solid waste collection coverage will increase to more than 80 per cent of households and would include recycling. Drainage in the city will be improved by removing waste from waterways and by widening and rebuilding flood relief culverts, bridges and sluice gates. A new treatment plant, pipes and pumping stations would be built in Guwahati.

Joint Secretary (Multilateral Institutions), Rajamony said that the water supply subproject would significantly augment supply and improve the quality of drinking water and wastewater treatment. Environmentally safe disposal of sewage and solid waste will help reduce water-borne diseases and improve public hygiene and health.

ADB Country Director for India Kim said that major growth in these cities in recent years has put serious pressure on basic services. Guwahati currently has no sewage system and more than two-thirds of its population has no access to piped water. This project will invest in sustainable urban infrastructure development for delivery of urban service at the national standards.

The signing of the tripartite agreement on Friday came a week after release of the third and final tranche of USD 50 million to Assam under the Assam Power Sector Enhancement Investment Program.

Country Director of ADB's India Resident Mission, Hun Kim, signed the third and final $50 million tranche of the loan with joint Secretary (Administration and Bilateral Cooperation) Ministry of Finance Prabodh Saxena, Commissioner and Secretary, Power along with S C Das, chairman, Assam State Electricity Board (ASEB), Hemanta Narzary signed on behalf of the State Government. The financing facility is expected to benefit around 1 million households, businesses, hospitals and schools.

The project, which is expected to be completed by June 30 2014, envisages helping ASEB adding an additional 430 MVA substation capacity and reducing system losses by 4 per cent. Part of the loan will be used to enhance energy efficiency through renovation and modernisation of existing 33/11 kV substations, the introduction of high voltage distribution systems, and conversion to aerial bunched cables for some high voltage and low voltage lines in the urban areas.

The ADB’s loan ordinary capital resources makes up to 68 per cent of the total project cost of almost USD 73 million, with the Government of Assam providing counterpart finance of USD 23 million. The loan has a 20-year term, including a five-year grace period with an annual interest rate determined in accordance with ADB's LIBOR-based lending facility.

The Assam Power Sector Enhancement Investment Program is designed to meet growing demand for electricity in one of India’s poorest states, where the large rural population relies mainly on the agriculture and manufacturing sectors for income. Weaknesses in the transmission of power have affected the competitiveness of businesses “Increased access to electrical power in remote communities can help meet growing demand and cut poverty,” Hun Kim said.

“This loan will help strengthen the state’s transmission and distribution system, and reduce technical and commercial losses,” said Saxena said.

“Given that a reliable power supply is critical for facilitating growth and creating employment opportunities, this project will help Assam attract investment and tap its economic potential, in addition to reducing power outages,” he said.

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