World Bank sanctions Rs. 925 crore loan for Rebuild Kerala second phase

With the World Bank clearance for the project, route is also clear for USD 125 mn loan from the Asian  Infrastructure Investment Bank.

Published: 26th June 2021 01:24 PM  |   Last Updated: 26th June 2021 09:02 PM   |  A+A-

Chief Minister Pinarayi Vijayan, then Revenue Minister E Chandreskharan and Chief Secretary Tom Jose at the Rebuild Kerala Conclave (File Photo | Vincent Pulickal, EPS)

Express News Service

Two years after sanctioning assistance of USD 250 mn dollar for the first phase of Rebuild Kerala Initiative (RKI), the World Bank approved USD 125 mn dollar assistance for the second phase of RKI. A meeting of executive of directors of the Bank held in Washington on Thursday approved the project proposal from the state government and sanctioned USD 125 mn (approximately Rs. 925 Cr). The loan will be under Programme-for-Results financing scheme, which means the amount will be sanctioned for specific development projects approved by independent evaluators.

With the WB clearance for the project, route is also clear for USD 125 mn loan from the Asian  Infrastructure Investment Bank. The second phase of the project conceived after the devastating floods that hit Kerala in 2018 will get a major push with the financial assistance of Rs. 1850 Cr reaching here from the two banks. Discussions with AFD, the French Development Agency, for a loan of 100 mn Euros (approximately Rs. 880 Cr) are also going on. The WB loan has a repayment period of 14 years with a grace period of six years.

The aim of the Rebuild Kerala Initiative is to incorporate disaster risk planning in the master plans of urban and local self-governments and to help make the health, water resources management,  agriculture, and Works departments more resilient to calamities.

“In today’s context of increased economic, climatic, and health shocks, building resilience of economies is a policy imperative,” said Junaid Ahmad, World Bank Country Director. “The Bank is therefore investing in Kerala’s capabilities to respond to shocks to the state economy and, importantly, prevent as much as possible the loss of lives, assets, and livelihoods. The objective is not to finance schemes but partner with the Government of Kerala to improve the state’s financial health; invest in sectors like health, water resources, social protection and agriculture; and address the drivers of natural disasters,
climate change, and pandemic risks,” he said.

Rebuild Kerala Initiative CEO and finance additional chief secretary Rajesh Kumar Singh said the approval from AIIB for USD 125 mn is expected soon. “We have already issued administrative sanction for projects over Rs. 7000 Cr and awarded works over Rs. 4700 Cr,” Singh told TNIE.

In the first phase, the World Bank had given USD 250 million dollar while the German bank granted 170 million euros (Approximately Rs. 2,215 Cr). The loan agreement for the first phase was signed with WB in June, 2019. The first phase of RKI helped the state draft a River Basin Conservation and Management Act, which will conserve and regulate water resources and ensure their sustainable management, allocation, and utilization. It also introduced climate-resilient agriculture, risk-informed land use, and disaster management planning.

The gravity of the 2018 flood - that affected 54 lakh people and displaced 14 lakh people – was assessed independently by the World Bank before arriving at the decision to support Rebuild Kerala Initiative.

“The groundwork laid during the first programme improved the government’s capacity to assess and respond to disasters. The new programme aims to enhance the state’s capacity to deal with potential shocks by mainstreaming climate and disaster risks into planning and investment processes,” said Elif Ayhan, Senior Disaster Risk Management Specialist and one of World Bank’s Task Team Leaders for
the programme.


  • One Health Platform: Establishing an IT-enabled One Health platform that will strengthen coordination, joint surveillance, and preparedness to counter future disease outbreaks.
  • Sustainable fiscal management: Establishing a debt management unit in the Department of Finance to support the state’s efforts to scale down its debt-to-GSDP ratio to a sustainable trajectory.
  • Disaster risk finance: Developing a comprehensive disaster risk financing framework; creating a unified database of vulnerable households for post-disaster safety net payments; piloting a modified crop risk insurance payment system, and mobilising market-based resources to complement public financing of disaster risks.
  • Climate-resilient urban development: To support risk-informed urban master planning, multi-year investment budgeting, and emergency management for increasing the state’s climate adaptation and mitigation initiatives.
  • Resilient food systems: Along with supporting agro-ecological zoning (AEZ) methods to promote farming systems that are resilient to climate shocks, the programme will set up an Integrated Agricultural Management Information System for precision farming.
  • Climate-resilient road infrastructure: To upgrade 400 km of the core road network through output- and performance-based road maintenance contracts and to establish a Road Maintenance Management System for rolling out climate-proof designs and ensuring adequate budget.

ALSO WATCH | Kerala's Covid-19 fight: A tale of two waves | TNIE Documentary


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