Thursday, April 14 2005 19:01 Hrs (IST) - World Time -

New Delhi: Asian Development Bank (ADB) today (Apr 14, 2005) approved a $ 200 million loan and grant assistance package for tsunami reconstruction work in India.

The package comes after World Bank's announcement of extending close to $ 450 million of the total $ 1.2 billion required by four States - Tamil Nadu, Kerala, Andhra Pradesh and Pondicherry - for tsunami work.

ADB will offer $ 200 million to help India restore livelihoods and rehabilitate and reconstruct damaged infrastructure in Tamil Nadu and Kerala in the wake of the devastating tsunami of December 2004.

"The project will focus on the highest priority areas, identified through consultations with the State Governments, civil society, and other stakeholders," Arjun Goswami, ADB's Principal Governance Specialist, said in a statement.

"Rehabilitation and reconstruction will be carried out to a pre-tsunami level or a higher, cost-effective, environmentally sustainable standard with design incorporating features critical to disaster prevention," he said.

The assistance package comprises a $ 100 million grant from ADB's Asian Tsunami Fund established in February 2005, and a $ 100 million loan from ADB's ordinary capital resources.

Of the amount, $ 143.75 million is allocated to Tamil Nadu and $ 56.25 million to Kerala.

Government of India and the State Governments of Tamil Nadu and Kerala will contribute $ 18.6 million towards the project's total cost of $ 218.6 million.

In accordance with ADB's Disaster and Emergency Assistance Policy, ADB's loan will have a 32-year term, including a grace period of eight years.

Interest will be determined in accordance with ADB's LIBOR-based lending facility.

The project's executing agency in Tamil Nadu is the Revenue Administration, Disaster Management and Mitigation Department, and in Kerala, the Department of Disaster Management. The project is due for completion in April 2008.

According to the ADB-UNDP-World Bank joint needs assessment, the reconstruction financing needs caused by the tsunami amounted to at least $ 868 million in Tamil Nadu and $ 157 million in Kerala.

The livelihoods of almost half a million families in these two States were also affected.

The three donors and the Government agreed to allocate livelihood restoration, transportation, and rural and municipal infrastructure in Tamil Nadu and Kerala to ADB, housing, fisheries, and agriculture sectors to the World Bank, and disaster risk management to the UN, according to respective resources and expertise.