Washington, DC (BBN)- The World Bank has approved a US$362 million assistance package to the Indian state of Orissa designed to improve the state’s road network and its agricultural tank systems.
The $250 million loan for the Orissa State Road Project, from the International Bank for Reconstruction and Development (IBRD), has a 30 year maturity which includes a 5-year grace period, a World Bank press statement said on Tuesday.
The quality of Orissa’s road network is considerably lower than comparator states in India. Only 22 percent of the state’s roads are paved, and most village and district roads remain unconnected to the national highway system.
The Orissa State Road Project (US$250 million loan) aims to remove transport bottlenecks in transport corridors through better performance, safety, and capacity of priority roads.
It will increase the role of the private sector in road infrastructure, and assist the state government to establish an institutional and governance framework in the sector, the World Bank said.
The $56 million credit for the Orissa Community Tanks Management Project, from the International Development Association, the World Bank’s concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.
Besides, $56 million loan for the Orissa Community Tanks Management Project, from the International Bank for Reconstruction and Development (IBRD), has a 30 year maturity which includes a 5-year grace period.
Orissa has made a strong fiscal turnaround. Its economic growth has accelerated, especially in the mining, agriculture, and service sectors. Yet Orissa remains one of India’s poorest states with nearly half of its 38 million people living under the official poverty line, most of them in rural areas.
Agriculture remains hugely important for Orissa. It accounts for about 30 percent of the state’s gross domestic product (GDP) and provides employment to over 75 per cent of workers in the state.
While the sector has improved in recent years, average productivity levels are still low. Tank irrigation plays an important role, but most tanks are performing below capacity, the statement added.
The Orissa Community Tanks Management Project (US$112 million credit and loan) will rehabilitate some 900 tanks covering a cultivable area of about 120,000 hectares spread across 29 districts of the state.
The project will support improvements in production technologies and management practices, and promote better market linkages.
BBN/SI/SI/AD01October08-6:52 PM (BST)
