The World Bank has just approved a US$216m loan to finance the delivery of urban services in the state of Karnataka, India, through enhancing urban infrastructure, and improving the institutional and financial frameworks at the state and local levels.

The Karnataka Municipal Reform Project is designed to support an evolving process of urban reforms in Karnataka that focus on large-scale restructuring of urban governance and management. These reforms are expected to result in the creation of well-governed and functioning cities that are able to finance and deliver basic urban services for the urban poor in a sustainable manner.

With a total population of about 53 million and a level of urbanization of 34 per cent, Karnataka is one of the most rapidly urbanizing states in India. Its growth in urban population, incomes, and competitive business has created a strong demand for quality services across all urban areas. Infrastructure investments have become an urgent priority for the state, yet the shortfall in meeting the investments need is huge.

“This project will significantly enhance the State’s urban services—from water supply and sewerage system to urban roads and slum up-gradation,” said Michael Carter, World Bank Country Director for India. “It will also contribute to improved health conditions of the poor by improving access to sanitary services.”