The purpose of this successful approach is to improve the level of investments in environmental-related urban infrastructure. The ultimate aim of this project is to improve the environment, the preservation of natural resources and the living conditions of the urban population in the region of and around the national capital Delhi.
NCRPB, the National Capital Region Planning Board, is the second investment of KfW in the field of environmental-related urban development. The aim of the project is the urban development of the National Capital Region (NCR*).
As a fact, the NCR has been a major driver of the economic growth in India and a unique example of inter-state regional development planning. The sheer pace and scale of urbanization in one of India’s fastest growing urban agglomerations, coupled with the resultant urban congestion and adverse environmental impact, requires massive investments in municipal development in this region. Despite of that, the possibilities of the international and national capital markets to provide the much needed financing for this gap are falling awfully short.
For this reason, NCRPBs major goal is to establish a much needed link between the substantial infrastructure financing needs and the domestic and international capital markets. This goal is supported by its institutional set up of NCRPB as a statutory body under the Ministry of Urban Development, constituted through an Act of Parliament in 1985. NCRPB has the mandate to prepare and implement a regional plan for the development of the NCR. As such, it is in a good position to acquire long term debt funding on national and international capital markets. Endowed with this capability and resources, NCRPB promotes the region in the following way:
- Funding of urban infrastructure projects in the NCR, which improve the environmental situation and efficient use of natural resources - and by that the living standards of the urban population in the region;
- Promotion of private sector participation in infrastructure through facilitation of joint ventures and public-private partnerships;
- Improving the financial management of urban local bodies enabling them to access debt finance from markets;
- Improving the planning and implementation capabilities of urban local bodies so that the infrastructure projects are realized in a manner they are sustainable and beneficial for the local community.
Based on this setting, KfW – on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) – provided funding to NCRPB in the year of 2012. Channeled through the Government of India and the Government to Tamil Nadu the funding provided by KfW to NCRPB is splitted into two elements:
- A EUR 100 million loan, which interest is subsidized with funds from the BMZ. This loan is utilized to refinance environmentally relevant projects, mainly in the areas of water supply, sewerage and waste disposal.
- In addition, BMZ provided grant funds in the amount of EUR 1 million. These funds are being used for an accompanying measure which supports the NCRPB and the municipalities / cities in the development and implementation of projects as well as to conduct feasibility studies/regional plans of different kinds.
*NCR is composed of the national capital territory as well as several districts of the neighboring states Haryana, Rajasthan and Uttar Pradesh, which share a border with the Delhi capital region. In addition, several counter-magnet areas are defined as part of NCR.