Press Release from 2022-11-29 / Group, KfW Development Bank

Prepared for climate change: KfW supports India with EUR 500 million for sustainable urban development

  • Strengthening municipalities against climate risks
  • Improving municipal water supply and sanitation
  • Improved living conditions for the population in the state of Tamil Nadu

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), KfW signed a EUR 500 million loan agreement with the Indian Ministry of Finance today for sustainable and climate-resilient urban development in the Indian state of Tamil Nadu. The funds are passed on to the municipalities of the state via the Tamil Nadu Urban Development Fund (TNUDF). The states then use these funds to implement projects to improve the climate resilience of urban infrastructure. These include water supply and waste water disposal projects, improved waste management, the construction of rainwater channels, energy-efficient street lighting and parks. The aim is to use a circular economy to ensure the availability of water in cities and to supply all households with water connections. There are also plans to regenerate bodies of water and wells, reuse treated waste water and improve flood protection.

”Progressing climate change and the pronounced urbanisation in India are associated with adverse environmental impacts and climate risk consequences for the growing Indian population. The urban population is under increasing pressure as it faces further challenges from the effects of escalating climate change and the associated climate risks such as severe heat, water scarcity and flooding. In particular, the poorer population groups have lower resilience, which must be strengthened,” said Christiane Laibach, Member of the Executive Board of KfW Group.

Improving infrastructure in Indian cities is also essential to maintaining the country’s economic power. The measures are also improving the living conditions of a significant proportion of the 82 million inhabitants in the Indian state of Tamil Nadu.

KfW has been financing the first two phases of the Sustainable Municipal Infrastructure Financing Programme for sustainable urban infrastructure measures amounting to more than EUR 260 million since 2008 already via the TNUDF. Of this, EUR 77 million was allocated to the first phase in 2008 and EUR 187.75 million to phase 2 in 2012 and 2014.

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