The World Bank has agreed to provide a $3bn loan to India to finance the construction of highways, the Union Road and Transport Minister Kamal Nath has announced.

The money would be used to convert a 6,372km of highway network from one-lane to two-lanes.

The minister said that the bank, for the first time, has informed him that they will be willing to fund the viability gap and also 50% of annuity projects.

The construction is part of the government’s plans to build 35,000km of national highways over the next three to four years with a planned 2009-10 investment of $20bn.

The country has a total of 19,702km of one-lane highways.