India, ADB ink $375 million loan pact for industrial corridor

ADB has signed a $375 million pact with India for loans and grants to develop the 800 km Visakhapatnam-Chennai Industrial Corridor, which is the first phase of the 2,500 km East Coast Economic Corridor. The signing follows ADB’s approval of $631 million in loans and grants in September 2016 to develop the corridor. The first tranche of $245 million will finance subprojects to develop high quality internal infrastructure in two of the four nodes of the corridor – Visakhapatnam and Yerpedu-Srikalahasti. Another component of the approved funds is a $125 million policy-based loan that will be used for the capacity development of institutions engaged in corridor management. Meanwhile, another agreement was signed for a $5 million grant from the multi-donor Urban Climate Change Resilience Trust Fund that is managed by ADB. The first tranche of the loan will have a 25-year term, including a grace period of five years, a 20-year straight line repayment method at an annual interest rate determined in accordance with ADB’s Libor-based lending facility. Besides, the Government of India will provide extra funding of $215 million to the $846 million project.