New Delhi: Asian Development Bank (ADB) on December 16 gave its approval for the first tranche of $ 200 million to Kerala aimed at fiscal reforms and social development.

The assistance, co-financed by Dutch government to the extent of $ 50 million, would help Kerala in implementing its Modernising Government Programme (MGP) and fiscal reforms.

"We welcome Kerala's commitment to reform. ADB and state government intend this loan to be the beginning of a long term partnership that involves work in sectors such as power and infrastructure," ADB director general (South Asia) Yoshihiro Iwasaki said in a statement.

The ADB aid would focus on creating an environment to achieve fiscal sustainability, improving the quality, equity and value for money of public services, improving targeting and quality of poverty reduction programmes and social services and increasing transparency, responsiveness, accountability and efficiency of state and local self governments, it said.

The ADB loan for a period of 15 years, including a grace period of three years, would carry LIBOR (London Inter Bank Offered Rate) determined interest rate.

PTI