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Global financial institution, World Bank has approved to provide loan of $1.915 billion to India for their healthcare, private investment, residential sector to support economic growth ahead.
Of the total $1.915 billion, World Bank will give $1 billion to support India's health sector for pandemic preparedness and enhanced health service delivery. The $1 billion loans are divided into two complementary loans of $500 million each.
According to the World Bank statement, through this combined financing of $1 billion, the Bank will support India’s flagship Pradhan Mantri-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), launched in October 2021, to improve the public healthcare infrastructure across the country. In addition to the national-level interventions, one of the loans will prioritize seven states including Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu, and Uttar Pradesh.
The two loans, Public Health Systems for Pandemic Preparedness Program (PHSPP) and Enhanced Health Service Delivery Program (EHSDP), are designed to be complementary and transformational in impact, supporting the Government of India’s reform agenda to accelerate universal coverage, improve quality, and increase the resilience and preparedness of India’s health system, World Bank said.
“The COVID-19 outbreak has re-emphasized the urgency for significant reforms to improve health sector performance in India," said Hideki Mori, the World Bank’s Acting Country Director for India. “India’s decision to invest early and significantly to strengthen its health system even as it emerges from the pandemic is a pioneering choice and we are pleased to support this important agenda."
Further, of the total, $750 million will be lent as a development policy loan (DPL) to the country to support reforms critical to addressing financing gaps by leveraging private sector investment in infrastructure, small businesses, and the green finance markets.
On private financing, Hideki Mori, the World Bank’s Acting Country Director for India said, “An efficient financial system capable of meeting the country’s investment needs is key to support India’s rebound from the pandemic and to realize its ambitious sustainable growth targets," adding, “This operation aims to reduce the pressure on public finances by leveraging private resources to support the country’s development goals."
For private financing, from the $750 million commitment, $667 million will be a loan from the International Bank for Reconstruction and Development (IBRD), and $83 million will be financed by a credit from the International Development Association (IDA), the World Bank’s concessionary lending arm. The loan and credit will be on IBRD terms and IDA non-concessional terms, respectively, with a final maturity of 18.5 years, including a grace period of 5 years.
Further, in total, World Bank approved $165 million in additional financing to support India’s residential sector to adopt rooftop solar systems and make solar energy more affordable. These solar photovoltaic (PV) installations will provide clean, renewable energy, and reduce greenhouse gas emissions by displacing generation based on fossil fuels. The project is projected to reduce greenhouse gas (GHG) emissions by 13.9 million tons.
Hideki Mori, the World Bank’s Acting Country Director for India said, “This additional financing will increase India’s installed capacity of grid-connected rooftop solar and help India towards its goal of sourcing 50 percent of its energy needs from renewable sources by 2030."
As per World Bank, the additional financing will directly finance 450 MW of rooftop solar capacity in the residential sector. Importantly, the project will provide concessional financing to developers and residential consumers and mobilize additional private capital. It aims to mobilize $71 million of private capital, in addition to the $151.61 million that has been mobilized so far.
For the residential sector, the additional financing includes a $150 million loan from the International Bank for Reconstruction and Development (IBRD) and another $15 million from the IBRD Fund for Innovative Global Public Goods Solutions.
On Thursday, World Bank also announced a $190 million loan to the southern Indian state of Tamil Nadu to address the housing needs of the lower-income groups and vulnerable populations.
It said that this newly approved Second Tamil Nadu Housing Sector Strengthening Program is the second of a series of two single-tranche operations. This Development Policy Loan (DPL), the second in a series, will support the ongoing housing policy improvements introduced by the Government of Tamil Nadu (GoTN) and strengthen institutions managing the housing sector in the state.
