OPEC fund loan to improve connectivity and transportation in India

The OPEC Fund for International Development (the OPEC Fund), in cooperation with the Asian Infrastructure Investment Bank (AIIB), is providing a US$100 million loan to the Government of India to fund the Chennai Peripheral Ring Road Project – Sections II and III available to the State of Tamil Nadu. The loan will support the construction of more than 50km of new roads, helping to reduce congestion and commercial traffic to ports while reducing pollution and travel times. The port of Chennai handles the second largest volume of containers in India.

The Director General of the OPEC Fund, Dr. Abdulhamid Alkhalifa, said, “Roads are vital for socio-economic livelihood and connectivity in India as they are the dominant mode of transportation.” Better physical connectivity around Chennai, a metropolitan city of more than 12 million people, will support economic growth and help meet the increasing demand for infrastructure and services. By reducing congestion, the project will also help to significantly reduce greenhouse gas emissions. The OPEC fund is interested in further strengthening its cooperation with India.”

Road transport accounts for around 90 percent of all passenger transport in India, while almost 65 percent of all goods transported in the country are transported by road. India has the second largest road network in the world and due to its expansion and the climatic challenges, the infrastructure must be continuously modernized. In urban areas in particular, the network must be constantly improved to cope with the growing population and a dynamic economy.

The new Chennai project involves the construction of two sections of a high priority peripheral ring road and associated infrastructure, including bridges and access roads. The development will connect four national highways and improve road traffic through an access controlled road, a separate access road and safe pedestrian and bus infrastructure, also improving road safety.

To date, the OPEC fund has provided over US$350 million in public funding for around 20 projects in India. The loans supported projects in the fields of energy, health, agriculture, education, transport, water and sanitation and promoted sustainable economic growth.

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