$381m World Bank loan will help rejuvenate India's Ganga River

The World Bank and the Government of India have signed a $381 million loan agreement for a project to rejuvenate the Ganga River.

The Second National Ganga River Basin Project will help stem pollution in the river and strengthen the management of the river basin which is home to more than 500 million people. The $400 million operation comprises a loan of $381 million and a proposed guarantee of up to $19 million. 

The $381 million variable spread loan has a maturity of 18.5 years including a grace period of five years. The $19 million Guarantee Expiry Date will be 18 years from the Guarantee Effectiveness Date. 

To ensure that these infrastructure assets function effectively and are well maintained, the project will build on the innovative Hybrid Annuity Model of public private partnership. Under this model, the government pays a private operator 40% of the capital cost to build a sewage treatment plant during the construction period; the remaining 60% is paid as performance-linked payments over 15 years to ensure that the operator runs and maintains the plant efficiently.