India and ADB Sign $125 Million Loan to Upgrade Infrastructure in Assam

In a major boost to urban development and climate resilience in the Northeast, the Government of India and the Asian Development Bank (ADB) signed a $125 million loan agreement on 22nd September 2025. The funding will support the Assam Urban Sector Development Project, aimed at upgrading essential urban services, especially in six district headquarters and Guwahati. The project will benefit around 360,000 residents through sustainable infrastructure, enhanced flood management, and inclusive development initiatives.

With Assam facing frequent urban flooding, water supply shortages, and the pressures of unplanned urban growth, this project marks a significant intervention to build climate-adaptive, livable cities in the region.

Assam Urban Sector Development Project

Improved Urban Water Supply

• Six water treatment plants will be constructed with a total capacity of 72 million litres per day.
• 800 kilometers of distribution pipelines will be laid across the towns of Barpeta, Bongaigaon, Dhubri, Goalpara, Golaghat, and Nalbari.
• The goal is to ensure continuous, metered water supply, improving public health and quality of life.
• A real-time monitoring system will track water distribution and help keep nonrevenue water (water lost before reaching consumers) below 20%.

Flood Management in Guwahati

• The project targets the Bahini Basin in Guwahati, which is prone to urban flooding.

Key components include,

• Flood diversion channels
• Upgraded drainage systems
• A nature-based retention pond to manage excess water and recharge groundwater naturally

These investments will significantly enhance the city’s resilience to heavy rainfall and climate shocks.

Digital and Financial Reforms

The project will introduce,

• GIS-based property tax database
• Digital billing systems for water
• Volumetric water tariff structure

These reforms aim to make urban service delivery more financially sustainable and efficient, reducing leakages and increasing transparency.

Institutional Strengthening

• A new Assam State Institute for Urban Development will be established in partnership with IIT Guwahati.
• The institute will focus on urban policy research, capacity building, and technical training, helping to institutionalize reforms and build long-term planning capacity.

Strategic Importance for Assam

Assam’s urban centers have historically faced challenges including,

• Inadequate water supply
• Chronic urban flooding, especially during monsoons
• Weak institutional capacity in urban governance
• Low service coverage and financial recovery

By addressing these bottlenecks, the project will,

• Improve urban livability and reduce disaster risk
• Support Sustainable Development Goals (SDGs), especially on clean water (SDG 6) and sustainable cities (SDG 11)
• Serve as a model for replicable urban resilience strategies in other northeastern and flood-prone states

Static Facts

• The Asian Development Bank (ADB) was established in 1966, with headquarters in Manila, Philippines.
• ADB’s primary mission is to promote social and economic development in Asia and the Pacific.
• Assam’s capital is Dispur, and Guwahati is its largest and most urbanized city.
• Nonrevenue water (NRW) refers to water lost due to leakages, theft, or metering inaccuracies.
• The Bahini River is a tributary of the Bharalu and one of Guwahati’s most flood-prone catchments.