GOI & ADB Approves $125 Million Loan to Upgrade Urban Services in Tamil Nadu

Three cities in the state of Tamil Nadu will get a $125 million loan from the Indian government and the Asian Development Bank (ADB) to build climate-resilient sewage collection and treatment, drainage, and water supply systems.

Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs under the Ministry of Finance, who signed on behalf of Government of India, and Hoe Yun Jeong, Officer-in-Charge of ADB's India Resident Mission, who signed on behalf of ADB, were the signatories to the tranche 3 loan agreement for the Tamil Nadu Urban Flagship Investment Program.

The funding represents the third and final installment of the $500 million multi-tranche financing facility (MFF) for the programme, which was approved by ADB in 2018 and is intended to construct high-priority water supply, sewerage, and drainage infrastructure in key industrial corridors throughout ten cities in the state.

The loan from tranche 3 covers Tamil Nadu's Coimbatore, Madurai, and Thoothukudi.

Following the signing of the loan deal, Mishra stated that the ADB finance would ensure that all people had access to fundamental water and sanitation facilities and would increase flood resilience in the project's target districts, which are also the state's industrial hubs.

"Through this project, ADB continues to support developing and improving urban services in the state by deploying new approaches such as build and operate modality, automatic meters for bulk water users, and real-time monitoring through supervisory control and data acquisition systems. ADB’s urban investments are aligned to support strategic industrial corridor development in Tamil Nadu", said Jeong.

The funding is expected to help build two sewage treatment plants in Coimbatore, together with 14 pumps and lift stations, 529 km of sewage collection pipes, and 14 km of sewage pumping mains. Further, climate-resilient stormwater drainage systems will be built in Thoothukudi.

The project in Madurai will help to commission 813 km of new water supply distribution pipelines that will link 163,958 homes to 115 newly created district-metered areas with smart water features to cut down on non-revenue water.

Moreover, two all-female self-help groups in Coimbatore and Madurai will get training on the advantages of connecting homes to sewage collection systems, water conservation, sanitation, and health and hygiene.