The Asian Development Bank (ADB) has approved a $139.55 million (approximately ₹1,250 crore) loan to improve urban infrastructure and municipal services in Puducherry, with the project expected to benefit more than 320,000 people.
The Puducherry Integrated Urban Livability Improvement Project will focus on strengthening water supply and sanitation infrastructure, modernising public spaces and improving municipal finances and institutional capacity. This is ADB’s first engagement in the Union Territory.
“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.
The bank will work with the Puducherry government to develop the city into a more liveable, tourism-friendly and climate-resilient growth hub.
Major push for water supply and sewerage
A significant component of the project involves upgrading Puducherry’s water supply and sewerage networks to address growing demand from residents and tourists.
The programme will upgrade 100 km of the existing water supply network and lay another 80 km of pipelines. It will also involve constructing new overhead service reservoirs, establishing district metered areas and setting up brackish water reverse osmosis desalination plants.
On the sanitation front, the project envisages laying 270 km of underground sewer network and rehabilitating 80 km of existing sewer infrastructure. A new sewage treatment plant with a capacity of 50 million litres per day will also be established.
Focus on urban mobility and climate resilience
The project will upgrade urban public spaces, including the construction of 4.5 km of pedestrian walkways designed to be accessible to people with disabilities.
Drainage systems will also be rehabilitated through concrete lining and stabilisation works. These interventions are aimed at improving pedestrian safety, preventing flooding and accidents, and reducing the impact of extreme weather events.
Municipal finances and governance
Beyond physical infrastructure, the ADB-funded programme will seek to improve the financial sustainability and institutional capabilities of Puducherry’s municipal administration.
Measures include more efficient revenue collection, upgrades to financial management systems and the introduction of a digital municipal service management platform. Integrated planning for water security and inclusive sanitation will also form part of the initiative.
Urbanisation and tourism drive infrastructure demand
The investment comes against the backdrop of rising pressure on Puducherry’s urban infrastructure. Urban areas account for around 68% of the Union Territory’s 1.8 million population, while the region attracts more than 2.3 million tourists annually.
Rapid urbanisation, climate-related risks and growing demand for essential services from both residents and visitors have put pressure on municipal infrastructure, affecting Puducherry’s competitiveness as an investment and tourism destination.
The project is part of ADB’s broader support for urban transformation and climate resilience in India, including initiatives under its Urban Challenge Fund and knowledge programmes covering city redevelopment, urban competitiveness and sustainable water and sanitation services.
Founded in 1966, ADB is a multilateral development bank supporting sustainable and inclusive growth across Asia and the Pacific. It is owned by 69 members, including 50 from the region.