India inks US$100-billion agreement with NBD for Rajasthan Water Sector


In order to deal with the water shortage in summer, a loan agreement for financing of Rajasthan Water Sector Restructuring Project for the Desert Areas was signed between the Government of India and the New Development Bank (NDB) recently in New Delhi. This is the first tranche loan of US$100 million approved by the NDB under the Multi-Tranche Financing Facility of US$345 billion for this project.


The objective of this project 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 Loan Agreement was signed by Mr Govind Mohan, Joint Secretary, Department of Economic Affairs, on behalf of the Government of India, and Mr Shaohua Wu, Director General, Project Financing, on behalf of NDB. The Project Agreement was signed by Mr Shikhar Agarwal, Principle Secretary, Water Resources Department, on behalf of the Government of Rajasthan. The representatives of the Government of India, NDB and the Government of Rajasthan also signed Facility Framework Agreement, under which NDB has agreed to provide Multi-Tranche Financing Facility for amount aggregating to US$345 million to the Republic of India for this project.


The execution of the project would multiple benefits such as:


  1. Arresting the seepage by rehabilitating the deteriorating canal lining of the Indira Gandhi Nahar Project (IGNP) which needs urgent attention;
  2. Rehabilitation of waterlogged areas;
  3. Modernization and optimization of the irrigation management practices in the project area by involvement of the water users’ associations (WUA) in the command area; and
  4. Strengthening of drinking water supply and irrigation facilities in the project area.


The project implementation period is six years. The Government of Rajasthan will implement the project primarily through Rajasthan Water Resources Department.