New Delhi, (IANS) : The Asian Development Bank (ADB) on Monday signed a $220 million loan agreement with India for improving road connectivity, transport efficiency and safety on state highways of Rajasthan, an official said here.

“The ADB and the government on Monday signed a $220 million loan for improving connectivity as well as transport efficiency and safety on state highways of Rajasthan,” a Finance Ministry statement said.

The loan is the first tranche of the $500 million Rajasthan State Highways Investment Programme, approved by the ADB Board in May this year, that will upgrade about 2,000 km of state highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements, the ADB said in a statement.

It will also enhance the capacity of the state public works department in the areas of road asset management, road safety and project management, it added.

According to the government, the first tranche of the loan will improve about 1,000 km of state highways and major district roads. It will have a 25-year term, including a grace period of 8 years, and carry an annual interest rate determined in accordance with ADB’s London interbank offered rate-based (LIBOR) lending facility.

Last week, the ADB announced their new $10-billion country strategy for India, with the focus on supporting low-income states and the development of economic corridors. The multilateral lender will assist with $5 billion over a five-year period for the needs of poorer states including Uttar Pradesh, Bihar, Jharkhand, Odisha and Chhattisgarh.

Besides, the bank is ready to invest up to $5 billion in these five years to develop the East Coast Economic Corridor, it was announced here.