ADB approves $139.55 million loan to enhance urban services in Puducherry

The Asian Development Bank (ADB) has approved a $139.55 million loan to improve urban service delivery and municipal governance in Puducherry, benefiting over 320,000 people.

The Puducherry Integrated Urban Livability Improvement Project will enhance resilient water supply and sanitation services, modernize urban public spaces, and strengthen municipal finances and institutional capacity, the bank said in a statement.

“The project marks ADB’s first engagement in the Union Territory of Puducherry and is aligned with our support to help India's cities become the engines of economic growth,” said ADB Country Director for India Mio Oka. “ADB will work with the Government of Puducherry to transform the city into a more livable, tourism-friendly, and resilient growth hub."

Urban areas are home to about 68 per cent of Puducherry’s 1.8 million population, attracting more than 2.3 million tourists annually. Rapid urbanisation, increasing risks related to the changing climate, and unmet demand for essential municipal services from tourists and residents have significantly reduced the city’s competitiveness as an investment and tourism destination, the statement said.

The project will enhance Puducherry’s water supply and sanitation services by upgrading 100 km of water supply network, laying 80 km of new pipelines, constructing new overhead service reservoirs, and establishing district metered areas and brackish water reverse osmosis desalination plants. It will also build 270 km of underground sewer network, rehabilitate 80 km of existing sewer network, and set up a new sewage treatment plant with a capacity of 50 million liters per day, the bank said.

Urban public spaces will be upgraded by constructing 4.5 km of disability-accessible pedestrian walkways and rehabilitating drainage systems with concrete lining and stabilisation to improve pedestrian safety, prevent flooding and accidents, and reduce the impacts of extreme weather events.

The project will strengthen the municipal government’s institutional capacity and financial sustainability by implementing more efficient revenue collection measures, financial management system upgrades, a digital municipal service management platform, and integrated planning for water security and inclusive sanitation.

The project complements ADB’s broader support for urban transformation and resilience in India, including initiatives under the Urban Challenge Fund and knowledge work on city redevelopment, urban competitiveness, and sustainable water and sanitation services, the bank said.

Published on October 31, 2026