NEW DELHI, Apr 13: The World Bank today announed financing for a new project in Rajasthan to improve highway efficiency, resilience, and safety across the state.
The Rajasthan Highway Modernization Project, worth $225 million, is aimed at transforming the State Highway Authority into a modern, service-oriented agency, while upgrading and maintaining about 800 km of selected highway corridors, making them safer, climate-resilient and more reliable for commuters.
The project will place strong emphasis on improving road safety management to reduce fatalities and improve safety across Rajasthan, the World Bank said in a statement.
The project will benefit more than 3 million people and improve connectivity to stimulate job creation in economic corridors across the agriculture, industrial, mining, and tourism sectors, it said.
Rajasthan is one of India’s largest states and serves as a critical gateway connecting 40% of India’s markets. Although the state has had an annual growth rate of 11% between 2015–16 and 2023–24, the state’s road infrastructure has not kept pace.
The project will pioneer the first Step-Up Loan (SuL) in India—an innovative financing instrument which eases initial fiscal pressure during the early, high-risk phase of the project followed by a higher pricing later, once the project is operational and better-positioned for market refinancing.
By crowding in nearly $295 million in private capital through public‑private partnerships and market borrowing, the project will reduce reliance on state budgets while supporting efficient mobility, traffic management, and reducing transportation costs.
“Strong, sector-focused reforms paired with private investment can deliver more and better-paying jobs for people,” saidPaul Procee, the World Bank’s Acting Country Director for India.
“The project will ensure more women and young people can seamlessly connect to places for jobs in economic corridors, boosting industrial competitiveness and tourism.”
The project will increase the share of roads in good or fair condition from 40 percent to 70 percent and reduce travel time between key economic and logistics nodes.
Digital systems will strengthen road safety enforcement and traffic management across 250 km of high-risk and high-density corridors, including tourist hubs like Jaipur and Jodhpur, helping to reduce crashes and improve mobility.
“Strengthening road safety and long‑term highway performance is central to Rajasthan’s infrastructure transformation,” saidReenu Aneja, Task Team Leader of the project.
“Through a new ‘Road as a Service’ approach, the project shifts the focus beyond construction to a service-delivery model that supports performance-based management, road safety, and user experience over the asset lifecycle.
The $225 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 35 years, with a Step-up Loan feature, including a grace period of 5 years.
