KfW supports India with EUR 500 million for sustainable urban development

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), the financing institution KfW has signed a EUR 500 million loan agreement with the Indian Ministry of Finance. The funding is intended to support sustainable and climate-resilient urban development in the municipalities of the Indian state of Tamil Nadu.

The funds will be channeled to the municipalities via the Tamil Nadu Urban Development Fund (TNUDF). These funds will be used to implement projects aimed at improving the climate resilience of urban infrastructure, including water supply and wastewater disposal, improved waste management, construction of rainwater drainage channels, energy-efficient street lighting, and development of parks. The goal is to ensure water availability in cities through circular economy principles and to supply all households with water connections. Plans also include regenerating water bodies and wells, reusing treated wastewater, and enhancing flood protection.

"Progressing climate change and the pronounced urbanization 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. Particularly poorer population groups have lower resilience, which must be strengthened," stated Christiane Laibach, Member of the Executive Board of KfW Group.

The improvement of infrastructure in Indian cities is also crucial for maintaining the country's economic power. The measures also aim to improve the living conditions for a significant portion of the 82 million inhabitants in Tamil Nadu. KfW has been financing sustainable urban development measures through the TNUDF since 2008 with over EUR 260 million.