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The legal agreements for World Bank assisted Karnataka Urban Water Sector Improvement Project (Ln.4730-IN) were signed between Government of India and World Bank, here today. The World Bank has agreed to provide a Loan of US$ 39.50 million for the project. The agreements were signed by Dr. Ranjit Bannerji, Joint Secretary (FB), Department of Economic Affairs on behalf of the Government of India; Mr. Michael F. Carter, Country Director, World Bank on behalf of the World Bank and Sri P. Ravi Kumar, Secretary, Urban Development Department on behalf of Government of Karnataka.
The total cost of the project is estimated at US$ 51.08 million with Government of Karnataka contributing the balance amount of US$ 11.58 million.
The objectives of the project are to launch Karnataka's Urban Water Supply (UWS) reform process based on the state urban water policy, improve UWS services in participating Urban Local Bodies and demonstrate the sustainability of efficient and commercially-oriented UWS service provision. The project has the following components:
1. Sector development and technical assistance to support G/oK to carry out sector reforms and prepare a follow-on investment project;
2. Physical investments in three urban local bodies (ULB"s) to improve water supply and demonstrate the feasibility of continuous safe water supply in pilot areas; and
3. Strengthen of the capacity of implementing agencies and institutions to manage and monitor the Project.
The IBRD loan has a variable spread over LIBOR and is a US $ denominated loan with a moratorium on principal payment for five years and a maturity of 20 years. The project will be implemented over a period of five years.
BSC/BY/GN-43/05
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