The Asian Development Bank (ADB) has agreed to provide a $275m loan to the Government of India to support the improvement of rural roads in five states.

The latest loan will be used for the construction of 3,693km of all-weather rural roads in Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal, benefiting about 1,800 rural settlements.

It represents the second tranche of an $800m funding facility under the Rural Connectivity Investment Program.

"Weak rural connectivity affects economic growth in rural areas and has a strong link to poverty."

Indian Department of Economic Affairs Joint Secretary of Multilateral Institutions Shri Nilay Mitash said: "The project will help construct all-weather roads in rural areas that will improve access to markets, district headquarters, health and education facilities, and other centers of economic activity."

ADB country director (INRM) Teresa Kho said: "Weak rural connectivity affects economic growth in rural areas and has a strong link to poverty, particularly in these five states.

"The second stage of this loan will invest in physical infrastructure, improve road design, road safety, and asset management," Kho added.

India’s Ministry of Rural Development (MORD) will act as the executing agency of the project at the central level, while the governments of the five states will be responsible with overall implementation at the state level for a 43-month period.

The second tranche is expected to be completed in June 2017.

The Government of India will provide counterpart funds of $81.56m for a total second tranche project investment cost of $356.56m.