The Indian Union Ministry of Road Transport and Highways is seeking a soft loan of Rs130bn ($1.9bn) from multilateral agencies for road projects, which it intends to develop under its National Highway Development Project (NHDP).

The ministry has sought for a Rs60bn ($880m) long-term untied loan from the Japanese International Cooperation Agency (JICA) to fund a part of its NHDP programme, reported The Economic Times, citing sources.

A soft loan from JICA would mean that India would have to pay an interest rate of 0.5% for a period of more than 25 years, reported Live Mint.

"We need support for certain projects under NHDP from external agencies."

The rest of the funding for the project has been sought from the Asian Development Bank (ADB), which will be used for special projects.

An official was quoted by The Economic Times as saying: "We need support for certain projects under NHDP from external agencies. The projects we would be undertaking are not high-traction ones.

"That’s why we are looking for easier loan repayment terms. Private investment will still take some time to come back.

"The efforts to raise cost-effective capital are very desirable and useful to achieve the ambitious targets, as well as reduce dependence on the exchequer."

The government also intends to increase the length of its highways by another 50,000km over the next five years. The length of the highways is currently 96,000km.

To implement this plan, the ministry would need an investment of Rs5tn ($73.8bn).

The list also includes construction of ten greenfield expressways spanning 16,000km and improving more than 22,000km of existing highways.

Union Minister for Road Transport and Highways Nitin Gadkari in a meeting with the Union Finance Minister Arun Jaitley had sought an allocation of Rs850bn (US$12.5bn) in the 2016-2017 budget.

The Indian Government has already approached ADB for a Rs240bn (US$3.5bn) fund for the construction of a bridge that links India with Sri Lanka, while JICA is funding the Delhi Metro Rail Corporation projects and the western freight corridor project of the railways.