The World Bank‘s Board of Executive Directors approved $225 million in financing on April 10, 2026, for the Rajasthan Highway Modernization Project in India, according to a press release by the World Bank. The project aims to upgrade roughly 800 km of selected highway corridors, making them safer, more climate-resilient, and more reliable. More than 3 million people are expected to benefit through improved connectivity and job creation across agriculture, industrial, mining, and tourism sectors.
Rajasthan is one of India’s largest states and serves as a critical gateway connecting 40% of India’s markets. The state recorded an annual growth rate of 11% between 2015–16 and 2023–24, yet its road infrastructure has not kept pace with that expansion. This gap in infrastructure forms the basis for the new financing initiative.
The project will pioneer the first Step-Up Loan (SuL) in India, an innovative financing instrument that eases initial fiscal pressure during the early, high-risk phase before shifting to higher pricing once the project becomes operational. By crowding in nearly $295 million in private capital through public-private partnerships and market borrowing, the initiative will reduce reliance on state budgets. The project also targets increasing the share of roads in good or fair condition from 40% to 70%, while cutting travel time between key economic and logistics nodes. Digital systems will strengthen road safety enforcement across 250 km of high-risk and high-density corridors, including tourist hubs like Jaipur and Jodhpur.
Paul Procee, the World Bank’s Acting Country Director for India, stated: “Strong, sector-focused reforms paired with private investment can deliver more and better-paying jobs for people. The project will ensure more women and young people can seamlessly connect to places for jobs in economic corridors, boosting industrial competitiveness and tourism.”
Task Team Leader Reenu Aneja added that the project introduces a “Road as a Service” approach, shifting focus beyond construction toward a service-delivery model that supports performance-based management, road safety, and user experience over the asset lifecycle. The project will also support the transformation of Rajasthan State Highway Authority’s into a modern, service-oriented highway agency.
The $225 million loan comes from the International Bank for Reconstruction and Development (IBRD) with a final maturity of 35 years and a grace period of 5 years under the Step-Up Loan feature. The financing is designed to reduce transportation costs and support efficient mobility and traffic management across the state. Together, the public and private components represent a combined investment aimed at long-term highway performance and road safety in Rajasthan.
