World Bank to provide $500 m loan for rural water supply

Multi-lateral funding agency, the World Bank will provide USD 500 million loan for water supply and sanitation projects in the rural areas of Assam, Bihar, Jharkhand and Uttar Pradesh.

"The World Bank has approved a USD 500 million credit for the Rural Water Supply and Sanitation (RWSS) Project for Low Income States to improve piped water supply and sanitation services through decentralised delivery systems in the Indian states of Assam, Bihar, Jharkhand and Uttar Pradesh," World Bank said in a release.

The project will be implemented over a six-year period.

It will support the design and implementation of a dedicated RWSS program for low income states under the ongoing National Rural Drinking Water Program in the Ministry of Drinking Water and Sanitation (MoDWS), it said.

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The phase 1 of the project will cover 33 districts in Assam, Bihar, Jharkhand and Uttar Pradesh.

These states have the lowest coverage of tap water with Bihar at 2.6 percent, Jharkhand at 3.7 percent, Assam with 6.8 percent and Uttar Pradesh at 20.2 percent, it added.

"Bihar, Jharkhand and Uttar Pradesh also lag significantly in sanitation, with more than 75 percent of the rural households not having access to latrines within their premises. This project is expected to directly benefit about 7.8 million rural people in these states," World Bank said.

World Bank said that only 31 percent of the 167 million rural households in India have access to tap water and domestic toilets (Census 2011).

About 67 percent of the rural population continues to defecate in the open and India accounts for about 50 percent of the world's open defecation.

"Some 3.8 million women, who bear the burden of securing daily water supplies...The project will reduce the time spent by women in collecting water, which they can now use in other productive ways," said Onno Ruhl, World Bank Country Director for India.

Besides, the project will also include investments for improving water supply and sanitation coverage, including construction of new infrastructure and rehabilitation of existing schemes.

The project will be financed by a credit from the International Development Association (IDA), the World Bank's concessionary lending arm which provides interest-free loans with 25 years to maturity and a grace period of five years.