World Bank Commits $300 Mn Loan To Empower Tamil Nadu's 21 Urban Bodies

The World Bank's Executive Directors have greenlit a fresh initiative supporting Tamil Nadu, aiming to enhance water and sewerage services for approximately 2 million people in cities. The USD 300 million Tamil Nadu Climate Resilient Urban Development Program will bolster 21 Urban Local Bodies (ULBs), elevating their service systems to provide efficient water supply and sanitation, notes the World Bank.

Using the Programme-for-Results (PforR) financing model, blending Investment Project Financing (IPF) and a USD 300 million loan from the International Bank of Reconstruction and Development (IBRD), this initiative ties disbursements directly to achieved outcomes while offering technical support. With a 32-year loan maturity and a 7-year grace period, this programme aims to fortify cities against climate challenges like floods and droughts, crucial for the state's urbanised landscape.

India's urbanising trajectory underlines the necessity for services like water and sanitation, particularly in the face of climate adversities. Auguste Tano Kouame, the World Bank's Country Director for India, emphasises the significance of bolstering cities to accommodate the influx of people and job opportunities anticipated by 2030.

Beyond enhancing water access, the program seeks to expand green spaces and parks within cities. Task Team Leaders Raghu Kesavan, Mansha Chen, and Lilian Pena P. Weiss highlight the initiative's focus on incorporating private sector involvement through performance-based contracts, municipal bonds issuance and governance reforms for financial stability. Additionally, community involvement, especially of women, will play a pivotal role in crafting effective climate action plans for cities.

The World Bank's longstanding collaboration with Tamil Nadu and ULBs over the last two decades has centered on establishing and scaling up urban infrastructure projects via a state-level urban institution, emphasizing public-private partnerships to secure financing for city development.