ADB signed $490 million Loan Agreement with GOI

Published on December 21, 2019
Current context: Asian Development Bank (ADB) and Government of India (GOI) have signed a $490 million loan on 20th Dec 19, for a public-private partnership project to upgrade Indian state's roads.
ADB signed $490 million Loan Agreement with GOI 
  • Under the project, about 1600 kilometres of state highways and major district roads will be upgraded from single-lane to two-lane widths in Madhya Pradesh.
  • An additional investment of $286 million will be mobilised through private sector participation under the PPP modality.
  • Through the hybrid-annuity model, a new partnership will be opened by introducing PPP for the sustainability of capital investments and leveraging government financing.
  • The Hybrid-Annuity Model passes the responsibility of design, implementation, build-operate-transfer and maintenance obligations to the private sector while attracting some private sector financing.
  • Under the model, the government will release 60% of the total project cost during construction, and the rest 40% is arranged by the concessionaire in the form of equity and commercial debt.
  • The concessionaire’s financial investment will be returned by the government over 10 years once the project is completed.

Question: 

Q.1 The Asian Development Bank (ADB) and Government of India (GOI) have signed a $490 million loan for a public-private partnership project to upgrade Which Indian state's roads?
a. Maharashtra
b. Madhya Pradesh
c. Manipur
d. Meghalaya

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