The Loan Agreement for financing of Rajasthan Water Sector Restructuring Project for the Desert Areas was signed between Government of India and the New Development Bank (NDB) on 13^th February 2018 at New Delhi. This is the first tranche loan of USD 100 million approved by the NDB under the Multi Tranche Financing Facility of USD 345 billion for this project.

The objective of this Project is to rehabilitate the 678 km long Indira Gandhi Canal system built during 1958-63 to prevent seepage, conserve water, and enhance water use efficiency as mandated by both national and state level policies on water use. The execution of the project would multiple benefits such as:

i.   Arresting the seepage by rehabilitating the deteriorating canal lining of the Indira Gandhi Nahar Project (IGNP) which needs urgent attention;

ii.  Rehabilitation of waterlogged areas;

iii.  Modernization and optimization of the irrigation management practices in the project area by involvement of the water users’ associations (WUA) in the command area

iv.  Strengthening of drinking water supply and irrigation facilities in the project area 

The project implementation period is 6 years. Government of Rajasthan will implement the project primarily through Rajasthan Water Resources Department.

The Loan Agreement was signed by Mr. Govind Mohan, Joint Secretary, Department of Economic Affairs on behalf of the Government of India and Mr. Shaohua Wu, Director General, Project Financing on behalf of the NDB. The Project Agreement was signed by Mr. Shikhar Agarwal, Principle Secretary, Water Resources Department on behalf of the Government of Rajasthan. The representatives of the Government of India, NDB and the Government of Rajasthan also signed Facility Framework Agreement under which NDB has agreed to provide Multi-Tranche Financing Facility for amount aggregating to USD 345 million to the Republic of India for this project.

Loan agreement secures multitranche financing for Rajasthan water sector restructuring, enabling canal rehabilitation and irrigation improvements. Loan agreement between the Republic of India and the New Development Bank provides the first tranche of financing under a Multi Tranche Financing Facility to support Rajasthan water sector restructuring. The financing targets rehabilitation and modernization of the Indira Gandhi Canal to stop seepage, conserve water, remediate waterlogged areas, improve irrigation and drinking water supply, and enhance irrigation management through involvement of water users' associations. Implementation is to be carried out by the Government of Rajasthan, primarily through the Rajasthan Water Resources Department, over a six year period, pursuant to the Facility Framework Agreement and Project Agreement signed by authorised representatives.