Rajasthan Secures USD 225 Mn World Bank Funding For Highway Development

The project is expected to benefit over 3 million people and support job creation in sectors such as agriculture, industry, mining and tourism. Paul Procee, World Bank’s Acting Country Director, India, said, “Strong, sector-focused reforms paired with private investment can deliver more and better-paying jobs for people.” “The project will ensure more women and young people can seamlessly connect to places for jobs in economic corridors, boosting industrial competitiveness and tourism,” Procee added. Infrastructure Gap Despite Strong Growth Despite recording an average annual growth rate of 11 per cent between 2015–16 and 2023–24, Rajasthan’s road infrastructure has lagged behind rising demand, even as the state serves as a key gateway linking nearly 40 per cent of the country’s markets. The new ‘Rajasthan Highway Modernization Project’ seeks to address this gap by upgrading and maintaining around 800 km of selected highway corridors, making them safer, more reliable and climate-resilient. Institutional Reforms and Innovative Financing The project will also support the transformation of the state’s highway authority into a modern, service-oriented agency. A strong focus has been placed on improving road safety systems to reduce accidents and fatalities. Notably, the initiative will introduce India’s first Step Up Loan (SuL), an innovative financing model designed to ease fiscal pressure during the initial phase of the project. The structure allows for lower repayments in the early, high-risk stage, followed by higher payments once the project becomes operational and financially stable. The project is expected to mobilise nearly USD 295 million in private investment through public-private partnerships and market borrowing, reducing dependence on state funding. Improved Road Quality and Travel Efficiency The project is expected to increase the share of roads in good or fair condition fr0m 40 per cent to 70 per cent, while reducing travel time between key economic and logistics hubs. Digital systems will be deployed to strengthen traffic management and road safety enforcement across 250 km of high-risk and high-density corridors, including major tourist centres such as Jaipur and Jodhpur. “Strengthening road safety and long term highway performance is central to Rajasthan’s infrastructure transformation,” said Reenu Aneja, Task Team Leader of the project. Aneja noted, “Through a new ‘Road as a Service’ approach, the project shifts the focus beyond construction to a service-delivery model that supports performance-based management, road safety, and user experience over the asset lifecycle.” Loan Terms The financing, provided by the International Bank for Reconstruction and Development, has a maturity period of 35 years, including a grace period of five years, and incorporates the Step Up Loan feature. (KNN Bureau)