Announcement of India to Borrow Twenty-Four Million One Hundred Thousand Dollars from IBRD for Urban Development on June 30, 1983

\ FOR IMMEDIATE RELEASE • World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/124 Contact: Hugh Blackman June 30, 1983 ( 202) 477-3573 INDIA TO BORROW $24al MILLION FROM IBRD FOR URBAN DEVELOPMENT Nearly 60,000 households in six cities in Madhya Pradesh state will benefit from area development and slum upgrading programs to be carried out with the assistance of a $24.1 million loan from the International Bank for Reconstruction and Development (IBRD), the World Bank announced today. The $50.1 million project is the first World Bank-assisted project in India to support improvements in several medium-sized cities in one state. Previous Bank-assisted urban development projects in India have concentrated on providing services to three of India's largest cities -- Calcutta, Madras, and Bombay, as well as one medium-sized city -- Kanpur. Project activities will be carried out mainly in two regions in the state which have the greatest potential for urban growth -- the Bhilai industrial/commercial region in the east and the Indore agro-industrial region in the west. • During 1971-81, Madhya Pradesh's urban population grew rapidly at an annual rate of 4.6%. The 1981 urban population was estimated at 10.6 million, or 20% of the state's total population. At present, there are serious deficiencies in services and housing in the urban areas. About half of the urban population does not have access to safe water, provision of sanitation systems is inadequate, and only about 25% of low-cost housing needs are being met. Under the project, some 206 hectares of serviced land for low- and medium-income groups and small-scale businesses will be provided. About 75 slum areas will be provided with water, drainage, roads, footpaths, sanitation, street lighting, and landscaping. A low-cost technology developed under a United Nations Development Programme/World Bank Global Sanitation Project will be used to carry out improvements in sanitation systems. Some 500,000 people will be the beneficiaries of the improved sanitation facilities. In addition, the project will finance technical assistance to strengthen the capacities of local, state, and national agencies such as the Housing and Urban Development Corporation, Ltd. (HUDCO), in urban management and resource mobilization. The Government of Madhya Pradesh, HUDCO, and local agencies will contribute a total of $26 million towards the project. The IBRD loan is for 20 years, including five years of grace, at an annual interest rate linked to the cost of Bank borrowings. The loan also carries an annual commitment charge on 0.75% of undisbursed balances, and a front-end fee of 0.25% on the amount of the loan • • NOTE: Money figures are expressed in U.S. dollar equivalents.