NEW DELHI: The Asian Development Bank (ADB) has approved a $631-million loan for construction of industrial corridor between Visakhapatnam and Chennai, part of India’s first coastal industrial corridor running from West Bengal to Tuticorin in Tamil Nadu. “The fund will help develop the first key 800-km section of the planned 2,500-km East Coast Economic Corridor expected to spur development on India’s eastern coast and enable seamless trade links with other parts of South and Southeast Asia,” ADB said in an official statement on Tuesday.

The total cost of the project is $846 million and work on it is expected to be over by 2031. The remaining $215 million will be funded by the Andhra Pradesh government. Loans and grants from the Manilabased bank comprise a $500 million two-tranche facility to build key infrastructure and a $125 million two-tranche loan to help in industrial policies and business promotion. The loan is for a period of 25 years at interest rate of 0.5% plus libor.

The ADB loan will help the government build state-of-theart industrial clusters, roads, efficient transport, and reliable water and power supplies with a skilled workforce and good business policies.

The new infrastructure will be built in the four main centres — Visakhapatnam, Kakinada, Amaravati and Yerpedu-Srikalahasti — along the corridor. It will include 138 km of state highways and roads, water treatment plants, 488 km of drinking water pipeline, 47 km of storm drains, 10 power substations and 281 km of power transmission and distribution lines.

According to ADB’s projections, automobile and electronic manufacturing will grow 24% a year over the next two decades along the coastal corridor districts. During this period, 7-13% growth is expected in plastics, food processing, textiles and apparels, chemicals, pharmaceuticals and petrochemicals sectors.