The proposed NDB loan through the modality of Project Financing Facility will be used by the Government of India for on-lending to the State Government of Madhya Pradesh for rehabilitating Major District Roads with a total length of about 2,000 km.

The objective of the Project is to improve connectivity of Madhya Pradesh’s rural interior. The Project complements the MP Roads I Project financed by NDB in 2016 and will maximize the benefits of the MP Roads I Project by further removing the bottlenecks and smoothing the traffic flows.  The Project will improve road conditions and enhance transport capacity, which will lead to benefits of less travel time, reduced vehicles operating cost, reduced emissions, and improved road safety. The positive impacts of the Project also include promoting inclusive development of the rural communities of the State of Madhya Pradesh and stimulating regional economic development through improved connectivity, enhanced accessibility and increased job opportunities, which will ultimately contribute to the well-being of the connected population.

The Project is estimated to be implemented over 5 years. The Government of Madhya Pradesh will be the Project Entity and will implement the Project through its Madhya Pradesh Public Works Department.. Contractors for the Project will be selected through a competitive and transparent bidding process.

The Project has been classified as category B in accordance with NDB’s Environment and Social Framework (ESF), as its impacts are temporary and site specific and can be mitigated by adherence to established environmental and social practices and requirements of India’s country system. The negative impacts mainly pertain to noise generation, water and air quality deterioration, slow traffic, flora removal, potential impacts on local communities from influx of construction labor, workers and public safety, etc. However, the intensity and duration of both social and environmental impacts are expected to be minimal.

The total cost of the Project is estimated to be USD 470 million. The NDB will finance USD 320 million, accounting for 68% of the total cost. The remaining balance will be financed by the Government of Madhya Pradesh.