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ADB to lend $320 million to India for highway project

The Asian Development Bank said on Wednesday it approved a loan worth $320 million to help India refurbish its national highway system and achieve sustainable economic growth.

India has launched a major programme to upgrade a 13,000-km highway system that will take 10 years to complete at a total cost of $13 billion.

"An improved road network will increase economic opportunities of rural communities," Shunso Tsukada, ADB senior transport specialist, said in a statement.

The Manila-based ADB said in a statement the loan was the second in a series of project financing efforts it intends to provide to the National Highway Authority of India.

The loan would fund the rehabilitation and widening of a 504- km portion of the national highway located at the western end of the East-West corridor. The project is expected to be completed by June 2006.

Total cost of the project is estimated at $576 million, with the Indian government shelling out $211 million and $45 million from the private sector.

The loan, from the ADB's ordinary capital resources, has a 25-year term, with a grace period of five years for repayment. Interest would be based on the bank's LIBOR-based lending facility.

The bank previously said it planned to hike annual lending to India to about $2.0 billion by 2005 from around $1.5 billion now, mainly to fund infrastructure projects and reduce poverty.

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