WASHINGTON, Dec. 21, 2023—The World Bank’s Board of Executive Directors today approved a new program to support Tamil Nadu and provide around 2 million people with more and better access to water and sewerage services in cities.
Tamil Nadu is one of the most urbanized states in India and faces increasing impacts of climate shocks like floods and droughts. For its rapidly growing population, access to services like water and sanitation is essential for more climate-resilient cities.
The $300 million Tamil Nadu Climate Resilient Urban Development Program will help 21 Urban Local Bodies (ULBs) update their delivery systems and provide quality and efficient water supply and sewerage services to consumers.
“By 2030, almost 70 percent of India’s new jobs will be generated in cities and more than 18 million people will move to cities,” said Auguste Tano Kouame, the World Bank’s Country Director for India. “As centers of economic growth, it is critical to strengthen their ability to cope with the impacts of climate change and ensure continuity in basic service delivery.”
Besides helping to gain better access to water supply to households, the Program will support ULBs to increase designated areas for green spaces and parks.
“This Program aims to leverage the private sector by introducing performance-based contracts. In addition, it will issue municipal bonds and support urban governance reforms to improve the fiscal health of ULBs and secure the future needs of the urban population,” said Raghu Kesavan, Mansha Chen, and Lilian Pena P. Weiss, the Task Team Leaders for the project. “Communities, especially women, will also play a key role in designing and supporting effective climate action plans for cities.”
For the past two decades, the World Bank has engaged with Tamil Nadu and ULBs to establish and scale-up a state-level urban institution as a public-private partnership facility that leverages various sources of finance for urban infrastructure projects in cities.
The $300 million loan from the International Bank of Reconstruction and Development (IBRD) will use the blended financing instrument of Program-for-Results (PforR) with Investment Project Financing (IPF) to link disbursement of funds directly to the achievement of results while providing technical assistance. The Program loan has a maturity of 32 years with a grace period of 7 years.