The Asian Development Bank’s (ADB) Board of Directors has approved a US$346 million loan to upgrade highways in the Indian state of Karnataka.

Karnataka, in southwest India, has a per capita income higher than the national average and has lower unemployment and poverty rates. The state also receives substantial foreign direct investment and has a strong industrial and services base. Road transport in the state has increased rapidly, and there is a need to prioritize expansion and improvement of the road network to retain Karnataka’s advantage in economic development. An efficient road network linking villages, towns, and cities will provide stronger links between remote, poor regions and more developed markets and urban hubs.

The project will improve 419 kilometers of state highways, upgrading them to two and four-lane widths with paved shoulders, depending on traffic needs, and improving culverts and bridges. The project roads will also address the needs of residents along the state roads for adequate footpaths, lights, and improvement to curves that pose safety hazards, especially at night. The project will carry out a road safety survey to identify critical accident spots across the state highways and carry out measures to improve these. Planned pedestrian and women-friendly elements include bus shelters, marked crossings, footpaths, and proper signage. In addition, the project will strengthen the efficiency and work of the Karnataka Public Works, Ports, and Inland Water Transport Department. 

Over the years, the state government has used various funding sources to improve state roads, including state budget, public-private partnerships, and finance from multilateral agencies, including ADB. This is the second loan from ADB for improving the state’s road network. The total cost of this project is US$655 million, of which the state government will provide US$202 million and the private sector will invest an estimated US$107 million through hybrid annuity contracts. The project is due for completion at the end of 2023.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.

Ravi Peri, an ADB Principal Transport Specialist, commented:

“The road network is a critical element of the transport infrastructure in Karnataka.”

“In line with state policy which recognizes road development as an engine of growth, the Karnataka State Highways Improvement III Project will improve road capacity and maintenance, promote safer roads, and increase access to markets and basic services.”