NDB to lend $100 mn for water project in Rajasthan

New Delhi, Feb 15 : India has signed a second loan agreement for $100 million with the New Development Bank (NDB) for efficient use of water in desert areas of Rajasthan, an official statement said on Thursday.

"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 Union Finance Ministry release said.

The loan agreement to finance Rajasthan Water Sector Restructuring Project for the Desert Areas was signed between Economic Affairs Department Joint Secretary Govind Mohan and NDB Project Financing Director General Shaohua Wu here on Tuesday.

The objective 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 implementation period is six years. The Rajasthan government will implement the project primarily through the Rajasthan Water Resources Department," said the release.

The representatives of NDB, Central and state governments also signed Facility Framework Agreement under which NDB has agreed to provide Multi-Tranche Financing Facility for $345 million to the country for this project.

The project is aimed at arresting the seepage by refurbishing the canal, rehabilitation of waterlogged areas, modernisation of the irrigation management practices by involving water users' associations, and strengthening of drinking water supply and irrigation facilities.