Maharashtra to get $5.8bn from World Bank

The World Bank has agreed to provide financial assistance to Maharashtra government's infrastructure projects worth $5.8 billion in the form of rupee loans, which included projects of around $2 billion related to Mumbai-makeover program.

This was said by World Bank Country Director Isabella Guerrero after a day-long meeting with Mumbai government officials. The state government was represented by Chief Secretary Johnny Joseph and the secretary, special projects, Sanjay Ubale.

The Bank also accepted the London Interbank Offer Rate (LIBOR) will be the reference rate for providing loan to the state. The LIBOR is currently 4.75 per cent.

Speaking with the media after the meeting, Ubale said the Maharashtra government had presented projects worth around $5.8 billion to the World Bank team and sought its financial assistance.

This included $2 billion projects to upgrade Mumbai's infrastructure, $650 million for irrigation, $350 million rural water supply projects, $500 million urban water supply projects and upgrading the state's health infrastructure.

However, the size of the financial assistance and the final rate of interest by the World Bank will be decided after the state cabinet and board of the World Bank approves in principal to provide the loan and the Union government gives a go-ahead to the Maharashtra government to raise the loan from the World Bank, said Guerrero and Ubale.

"We asked the Bank to provide financial assistance at competitive rates as there were attractive offers from other sources as well like from the Japan Bank of International Cooperation, he added.