In order to upgrade water supply, drainage systems and road infrastructure in Jammu and Kashmir, the Asian Development Bank (ADB) agreed to lend $110 million to the union government.
The multilateral bank gave this loan from its Ordinary Capital Resources for a period of 25 years including a grace period of five years. The bank would impose a commitment charge of 0.15 percent and would determine interest rate in accordance with its LIBOR-based lending facility.
The project will enable raising average water supply in Jammu, from 90 liter per day per capita to 135 liter per day per capita through rehabilitation and improvement of infrastructure.
The loan would also facilitate a project for reducing inner city traffic congestions, resulting in positive economic impacts. Pertinently, the loan represents the second Tranche of a $300 million Multi-tranche Financing Facility (MFF) Jammu and Kashmir Urban Sector Development Investment Program (JKUSDIP). The agreement for the 1st tranche of $42.2 million was signed on December 28, 2007 and is under implementation.
This second tranche will help develop infrastructure for solid waste management, drainage and transport in Jammu and Srinagar.
The second tranche loan would benefit over two million people in Srinagar and Jammu by giving them access to water supply, functional drainage systems, and better road facilities.