New World Bank funds for India projects

The World Bank has approved two financing packages worth a total of US$ 318 million to support road improvement projects and low income housing development in India.

The bulk of the funds – US$ 216 million – will support construction of the government’s Stage Transport Project II (KSTP II) in the south-western state of Kerala.

The funds will be used to upgrade 363 km of strategically important state highways. Of the 4,340 km of Keralan highways, around 70% are still single-lane with 54% in poor condition, according to the World Bank.

Another financing package worth US$ 100 million will be used to support India’s national Low Income Housing Finance Project through the National Housing Bank.

The World Bank estimates that India’s urban population will hit 600 million by 2031 – more than double that in 2001. Housing shortages in India are also acute: the 2012 urban housing backlog was estimated at 19 million, indicating that one fourth of the urban dwellers are living in inadequate housing or are homeless.

Onno Ruhl, World Bank country director for India said, “This project will allow low-income households to switch from expensive informal finance to longer-term, formal sources for their housing needs. This we expect will contribute to an average increase in incomes of people at the bottom of the pyramid.”