New Delhi: In a major show of commitment to India’s urban growth, the Asian Development Bank (ADB) has announced a five-year plan to mobilise up to $10 billion, including third-party capital, to boost urban infrastructure and services across the country. The plan was unveiled by ADB President Masato Kanda following his meeting with Prime Minister Narendra Modi in New Delhi.
The new initiative is aimed at strengthening India’s metro and Regional Rapid Transit System (RRTS) corridors and advancing investments in sustainable and inclusive urban development.
“Cities are engines of growth,” Kanda said after meeting the Prime Minister. “ADB will mobilise capital, accelerate delivery, and scale solutions that keep India’s urban economy moving and people thriving on the road to Viksit Bharat @ 2047.”
Urban Challenge Fund at the centre of ADB’s India strategy
A key pillar of ADB’s five-year urban programme is support for the Indian government’s Urban Challenge Fund (UCF), a flagship initiative aimed at attracting private investment in urban infrastructure projects. ADB’s funding approach will include sovereign loans, private sector financing, and technical assistance, with $3 million specifically set aside to develop bankable projects and enhance the capabilities of state and local urban bodies.
ADB’s recent analytical work has already supported UCF planning in 100 Indian cities, focusing on urban growth hubs, creative city redevelopment models, and improvements in water supply and sanitation infrastructure.
The UCF is expected to act as a catalyst in attracting both domestic and foreign capital to urban projects, particularly in Tier 2 and Tier 3 cities where infrastructure gaps are more pronounced.
Urban transport, metro rail, and clean energy in focus
With India’s urban population projected to exceed 40% by 2030, ADB is set to significantly scale up its interventions in the urban transport space. Over the past decade, ADB has already committed $4 billion to metro and RRTS projects in eight Indian cities, including the Delhi–Meerut RRTS, Mumbai Metro, Chennai Metro, and Bengaluru Metro.
These projects are designed to ease congestion, improve air quality, and enhance accessibility for marginalised communities, including persons with disabilities. Kanda visited the Delhi–Meerut RRTS, India’s first high-speed regional rail corridor, where he interacted with women who had received job-oriented skills training through project-linked initiatives.
In addition to transport, ADB’s urban development focus also extends to clean energy and renewable power. During his visit, Kanda toured Gurugram-based ReNew Power to explore opportunities for deeper collaboration in India’s energy transition.
Annual lending target of $4–4.5 bn for sovereign projects
Earlier this week, Kanda also met Union Finance Minister Nirmala Sitharaman and reaffirmed ADB’s commitment to provide between $4 billion and $4.5 billion per year in sovereign loans. In parallel, the bank intends to offer around $1 billion annually in private sector funding, further strengthening its blended finance strategy in India.
ADB’s support will not be limited to urban centres. Kanda highlighted the institution’s broader commitment to India’s rural development, with a focus on improving food systems, entrepreneurship, and employment generation in non-urban areas.
“Our shared agenda centres on urban transformation, private sector development, and skills programmes that strengthen India’s manufacturing base,” Kanda said during his official engagements.
Metro expansion, rooftop solar projects also on the agenda
Kanda also met Union Housing and Urban Affairs Minister Manohar Lal Khattar, where discussions centred on scaling metro rail networks, implementing transit-oriented development (TOD), and expanding rooftop solar projects in urban areas.
To mobilise greater private participation, ADB is currently engaging with CEOs and industry leaders from infrastructure, finance, agriculture, and social sectors, signalling a multi-stakeholder approach to infrastructure-led growth.
ADB’s country partnership strategy for India (2023–2027) lays out a roadmap for financing of more than $5 billion annually, including $1 billion in nonsovereign operations, which are expected to act as levers to draw additional private investment into India’s infrastructure ecosystem.
ADB’s India partnership: Over $68 bn committed till date
ADB began its operations in India in 1986, and since then, it has committed a cumulative total of $59.5 billion in sovereign lending and $9.1 billion in nonsovereign investments, as of April 2025.
Currently, ADB’s active sovereign portfolio in India comprises 81 loans worth $16.5 billion, covering key sectors such as transport, urban development, energy, skills, health, and rural livelihoods.
The latest announcement marks one of ADB’s most ambitious urban infrastructure plans for India to date, underscoring its long-term commitment to supporting India’s transition to a more inclusive, connected, and sustainable urban future.
