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15 December, 2025
Loan Agreement between the Government of India and the Asian Development Bank (ADB)
Wed 17 Dec, 2025
Context:
The Government of India and the Asian Development Bank (ADB) have recently signed loan agreements worth more than USD 2.2 billion to accelerate development projects across various states of India.
Key Highlights:
- This cooperation is a significant step towards achieving India’s vision of “Viksit Bharat @2047.”
- Total Amount: More than USD 2.2 billion (approximately ₹18,500 crore).
- Number of Loans: Five major loan agreements.
- Signatories:
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- On behalf of the Government of India: Saurabh Singh, Deputy Secretary, Department of Economic Affairs, Ministry of Finance.
- On behalf of ADB: Aarti Mehrotra, Officer-in-Charge and Deputy Country Director, ADB India Resident Mission.
- Objective: To strengthen flagship initiatives such as Atmanirbhar Bharat, Make in India, Skill India, and Climate Action, while promoting employment generation, environmental protection, and inclusive growth.
Major Projects and Their Objectives:
- Industrial Corridor Development:
- Large-scale investments under the National Industrial Corridor Development Programme (NICDP) to boost manufacturing and trade.
- Roads and Connectivity:
- Financing for upgrading state highways and district roads in various states—especially Maharashtra, Bihar, and Madhya Pradesh—under the PM Gati Shakti initiative.
- Urban Services and Water Management:
- Improvements in 24/7 water supply, sanitation systems, and flood management infrastructure in selected cities.
- Green Energy:
Dedicated loans for solar energy and energy-efficiency projects, supporting India’s Net Zero commitments.
Detailed Description of Each Project:
| Project Name | Amount (USD) | States/Regions Covered | Key Objective | Expected Beneficiaries | Impact |
| Prime Minister’s Skilling and Employability Transformation (PM SET) Programme | 846 million | 12 states (including Maharashtra, Gujarat, Tamil Nadu, etc.) | Modernization of 650 Industrial Training Institutes (ITIs) and upgrading 5 National Skill Training Institutes as Centres of Excellence | 1.3 million youth (especially rural populations and women) | 20% increase in employment rate; skilled workforce for renewable energy, electric mobility, and advanced manufacturing |
| Accelerating Affordable and Inclusive Rooftop Solar Systems Development Programme (Subprogramme 1) | 650 million | Pan-India | Promotion of rooftop solar under PM Surya Ghar: Muft Bijli Yojana, regulatory reforms, and low-interest loans | Over 10 million households | Addition of 10 GW solar capacity; 50% reduction in electricity bills; 7 million tonnes reduction in carbon emissions |
| Assam State Tertiary Health Care Augmentation Project (ASTHA) | 398.8 million | Assam | Modernization of medical colleges in Guwahati, Dibrugarh, and Silchar; strengthening medical education | Over 5 million people (especially rural populations) | 1,000 additional hospital beds; improved medical education; 15% reduction in mortality rate |
| Chennai Metro Rail Investment Project (Tranche 2) | 240 million | Tamil Nadu (Chennai) | Construction of 20 km of elevated and underground corridors with 18 new stations | 2 million daily commuters | 30% reduction in traffic congestion; climate-resilient stations; employment generation (50,000 jobs) |
| Integrated Ecotourism and Sustainable Agri-based Livelihood Development Project in Meghalaya | 77 million | Meghalaya | Promotion of ecotourism, climate-smart agriculture, and local livelihoods | 100,000 tribal and local farmers | 25% increase in income; 10,000 tourism-related jobs; enhanced forest conservation and biodiversity |
Strategic Significance of the Loan Agreement:
- Sustainable Development Goals (SDGs):
- These projects support key SDGs such as Affordable and Clean Energy (SDG 7), Good Health and Well-being (SDG 3), Quality Education (SDG 4), and Sustainable Cities and Communities (SDG 11).
- Climate Resilience:
- Rooftop solar and ecotourism initiatives strengthen India’s Net Zero and climate adaptation goals.
- Boost to Economic Growth:
- Infrastructure investments will generate a multiplier effect, leading to higher employment and GDP growth.
- Reducing Regional Imbalances:
- Special focus on Northeastern states like Assam and Meghalaya promotes inclusive and balanced regional development.