Tamil Nadu: World Bank To Strengthen 21 Urban Local Bodies For Quality Water Supply, Improved Sewerage System

The World Bank has approved a new programme to support Tamil Nadu and provide around 2 million people with better access to water and sewerage services in cities.

Tamil Nadu is one of the most urbanised states in India and faces increasing impact of climate shocks like floods and droughts. For its rapidly growing population, access to services like water and sanitation is essential to create more climate-resilient cities.

The $300-million Tamil Nadu Climate Resilient Urban Development Program will help 21 urban local bodies (ULBs) update their delivery systems and provide quality and efficient water supply and sewerage services to consumers.

"By 2030, almost 70 per cent of India’s new jobs will be generated in cities and more than 18 million people will move to cities," said Auguste Tano Kouame, the World Bank’s Country Director for India.

"As centres of economic growth," he added, "it is critical to strengthen their ability to cope with the impacts of climate change and ensure continuity in basic service delivery."

"This programme aims to leverage the private sector by introducing performance-based contracts. In addition, it will issue municipal bonds and support urban governance reforms to improve the fiscal health of ULBs and secure the future needs of the urban population," said Raghu Kesavan, Mansha Chen, and Lilian Pena P Weiss, the task team leaders for the project.

"Communities, especially women, will also play a key role in designing and supporting effective climate action plans for cities," they said.

For the past two decades, the World Bank has engaged with Tamil Nadu and ULBs to establish and scale up a state-level urban institution as a public-private partnership facility that leverages various sources of finance for urban infrastructure projects in cities.

The $300-million loan from the International Bank for Reconstruction and Development (IBRD) will use the blended financing instrument of Program-for-Results with Investment Project Financing to link disbursement of funds directly to the achievement of results while providing technical assistance.

The programme loan has a maturity period of 32 years, with a grace period of seven years.