The Asian Development Bank (ADB) has approved a total of USD 1.85 billion in financial assistance to support the Government of India's urban development and clean energy initiatives. The funding package includes a USD 1 billion loan for urban reforms and investments, along with a USD 850 million loan to accelerate the implementation of the government's flagship rooftop solar programme. 
The USD 1 billion Urban Transformation and Investment Program will support the implementation of the Government of India's Urban Challenge Fund (UCF) and related urban reforms. According to ADB, the programme is designed to strengthen urban institutions, improve integrated economic and spatial planning, and help urban local bodies enhance their financial capacity to meet growing infrastructure requirements. 
The programme will also encourage resilient urban regeneration with a focus on creating safer and more inclusive cities, particularly by protecting the interests of women and girls. It includes support for transit-oriented development, better management of public spaces, and urban planning that promotes sustainable growth. 
ADB said the programme will also help cities access commercial sources of funding by promoting municipal bonds and other market-based financing options. In addition, it will support the modernisation of urban governance through digital systems that improve transparency, operational efficiency, and evidence-based decision-making. 
The approval comes as India continues to witness rapid urbanisation. According to ADB, cities currently generate nearly 70 per cent of new jobs and contribute around 63 per cent of the country's Gross Domestic Product (GDP). This share is expected to increase to 75 per cent by 2030, highlighting the growing role of urban centres in India's economic development. 
Despite this growth, ADB noted that many Indian cities continue to face challenges such as limited institutional capacity, inadequate financial resources, and restricted access to market-based financing. These issues have affected the ability of urban local bodies to manage expanding populations, develop infrastructure, and attract long-term investments. The Urban Challenge Fund, announced in the Union Budget 2025-26, was introduced to support cities in developing growth hubs and improving urban infrastructure through competitive funding linked to reforms. 
In a separate announcement, ADB also approved a USD 850 million loan under the Affordable Rooftop Solar Adoption programme to help expand rooftop solar installations across the country. The funding is expected to support faster implementation of the government's rooftop solar mission while making clean energy more affordable and accessible for households. 
ADB Country Director for India Mio Oka said the programme supports a people-centred energy transition by reducing households' exposure to energy price volatility and supply disruptions. The initiative will also strengthen electricity distribution systems, generate green employment opportunities, increase participation of women in the renewable energy sector, and strengthen domestic clean energy supply chains. 
The programme includes provisions for training and certification of at least 6,000 people, with at least one-third of the beneficiaries being women. It will also facilitate the development of model solar villages and support innovative distributed solar projects across different regions. 
In addition, the programme aims to improve vendor accountability, promote greater participation of women in distributed renewable energy projects, and strengthen the safe handling, recycling, and disposal of solar photovoltaic panels and battery waste as rooftop solar installations increase across the country. 
The latest funding builds on ADB's long-standing partnership with India in supporting infrastructure, urban development, renewable energy, climate resilience and public sector reforms. Over the years, ADB has financed several urban transport, water supply, sanitation and smart city projects across multiple states, alongside renewable energy initiatives that contribute to India's climate commitments. 
According to ADB, its support under the rooftop solar programme is expected to help India achieve its target of 30 gigawatts of cumulative rooftop solar capacity, reduce 28.8 million tonnes of carbon dioxide equivalent emissions, and expand access to affordable clean energy for millions of households. 
Source PTI