ADB provides $250 million loan for tourism development in four states including H.P



New Delhi: The Asian Development Bank (ADB) today announced that it has approved a multitranche financing facility of 250 million dollars for upgrading tourist infrastructure and services in four Indian states. The ‘Infrastructure Development Investment Program for Tourism’ is part of a broad tourism development plan for the four states, namely Himachal Pradesh, Punjab, Tamil Nadu and Uttarakhand, drawn up previously by the Indian government and ADB, which will cost about 1.7 billion dollars. ”Urban and rural communities will benefit from investments that expand tourism-related business opportunities and employment, and this can help mitigate urban and rural unemployment and poverty,” says ADB Director General (South Asia Department) Hafeez Rahman.

The program will fund basic infrastructure around natural and cultural heritage sites and improve last-mile connectivity to make them more convenient and safe for visitors. It will also support policy reforms to make the sector more attractive to private investors. Another key element will be increasing the involvement of local communities in tourism-related activities to provide new livelihoods and incomes, particularly for poor, rural dwellers. The loans under the multitranche financing facility will come from ADB’s ordinary capital resources and will be provided in five tranches. The first tranche loan of 43.4 million dollars, for initial sub-project activities in Himachal Pradesh and Punjab has a 25-year term with a grace period of 5-years and an annual interest determined in accordance with ADB’s LIBOR-based lending facility. The Indian government and the four participating state  governments will make counterpart contributions of 107.1 million dollars for a total investment cost of 357.1 million dollars.  The Department of Tourism in each participating state will execute the project, which is due for completion by June 2020.

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