New Delhi: Multilateral funding agency Asian Development Bank on Thursday said it will provide loan worth $608.2 million to Bihar and Orissa, for upgrading their infrastructure.

Asian Development Bank (ADB) will provide 25-year loan worth $420 million to Bihar for upgrading and expansion of the state’s highway network, aimed at supporting economic expansion and alleviate poverty.

The Bihar State Highways Project, with a total investment of $468 million, will improve about 820 kilometers of road under the state’s highway development programme.

A $1 million-technical assistance has also been granted for reforming road sector institutions. Centre will give the remaining $48 million for the project.

With the expanding economy, demand for good roads has increased as they “will improve access to socio-economic services, increase employment opportunities and improve transport services, which will reduce poverty in the region,” a senior transport specialist with ADB South Asia Department Hiroaki Yamaguchi said in a statement.

Under the current programme, two roads projects have been have been undertaken for reconstruction.

The funding agency will also provide a $188.2 million multi-tranche loan to help in modernising the irrigation infrastructure and management systems in Orissa.

The investment will focus on four northern river basins and a part of the Mahanadi River Delta in Orissa.

The irrigation systems in the target areas have deteriorated and have limited integration with agriculture support services and marketing systems.

The project will ensure efficient water use, boost agricultural productivity, and accelerate economic development in the area.

Of the total project cost of $268.8 million, ADB will provide $188.2 million and the balance $73.4 million will be given by the Orissa government, while beneficiaries will contribute $7.2 million in cash or kind.