OPEC Fund loan to improve connectivity and transportation in India

July 4, 2023: The OPEC Fund for International Development (the OPEC Fund) is providing a US$100 million loan to the government of India for the financing of the Chennai Peripheral Ring Road Project – Sections II & III in partnership with the Asian Infrastructure Investment Bank (AIIB) and the State of Tamil Nadu. The loan will support the construction of more than 50 km of new roads, helping to ease congestion and commercial traffic to ports, while reducing pollution and travel times. Chennai port handles the second largest volume of containers in India.

OPEC Fund Director-General Dr. Abdulhamid Alkhalifa said:

“Roads are crucial for socio-economic livelihood and connectivity in India as they are the dominant mode of transportation. Better physical connectivity around Chennai, a metropolis of more than 12 million people, will support economic growth and help meet the rising demand for infrastructure and services. By reducing congestion, the project will also contribute to significantly reduce greenhouse gas emissions. The OPEC Fund is keen on further strengthening its cooperation with India.”

Road traffic constitutes around 90 percent of India's total passenger traffic, while nearly 65 percent of all transported goods in the country are carried by roads. India has the second largest road network in the world and due to its extent and climate challenges the infrastructure requires continuous upgrades. Especially in urban areas the network is in constant need of improvements to cope with a growing population and a dynamic economy.

The new Chennai project includes the construction of two sections of a high priority peripheral ring road, as well as related infrastructure including bridges and access roads. The development will connect four national highways and upgrade road transport with an access-controlled road, a separate service road and safe pedestrian and bus infrastructure, improving also road safety. 
 
To date, the OPEC Fund has provided over US$350 million of public sector financing in India for around 20 projects. The loans have supported energy, health, agriculture, education, transport and water & sanitation projects and promoted sustainable economic growth. 
 
About the OPEC Fund 

The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed more than US$24 billion to development projects in over 125 countries with an estimated total project cost of US$190 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA, Outlook Positive by S&P. Our vision is a world where sustainable development is a reality for all.