Rs. 300 cr. WB loan for rural project

By Our Special Correspondent

NEW DELHI, JAN. 4. The World Bank (WB) has extended a concessional loan of $ 65.5 million (about Rs. 300 crores) for the Kerala Rural Water Supply and Environment Sanitation Project. Since the assistance is through the International Development Agency (IDA), it is interest-free with a 35-year repayment period and a 10-year grace period.

The overall objective of the project is to improve the quality of rural water supply and environmental sanitation services in Kerala. The State Government has taken a policy decision to decentralise rural water supply service delivery from a State sector agency to the grama panchayats and in line with this policy, the project will introduce a new service delivery mechanism through a partnership among four key players. The four partners are the Kerala Rural Water Supply Agency (KRWSA), which is an autonomous registered society at the State level, grama panchayats, beneficiary groups and non-governmental organisations. The institutional arrangement is expected to be sustained beyond the project duration with the ultimate objective of replicating it throughout the State.

The project will be implemented in 80 grama panchayats in the districts of Palakkad, Malappuram, Thrissur and Kozhikode. The project will also focus on tribal population in nine grama panchayats.

Prior to the signing of the loan agreement, the Kerala Government has taken vital decisions such as empowering beneficiary groups to make investment decisions and independently manage project funds, a decision on 25 per cent capital cost sharing by the beneficiary groups and grama panchayats, 100 per cent financing of overhead and management costs by user groups and the setting up of a gender-balanced, multi-disciplinary project implementation team. The Kerala Government has also drafted a groundwater Bill to withdraw agricultural power subsidy to paddy farmers.

The project also has a national component for which approximately $ 3 million has been earmarked for assisting the Rajiv Gandhi Drinking Water Supply Mission in promoting its national rural water supply and environmental sanitation reform agenda.

The agreement for the loan was signed here today by Mr. Adarsh Kishore, Additional Secretary in the Union Finance Ministry, Mr. Elias George, Secretary, Irrigation and Water Supply in Kerala, Mr. James Verghese, Executive Director KRWSA, and Mr. Edwin R. Lim, Country Director India of the World Bank.

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Section  : Southern States
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