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Tranche 2 will finance water supply infrastructure in Guwahati, and drainage infrastructure in Guwahati and Dibrugarh cities of Assam. The tranche will support infrastructure investments to (i) augment water supply system in Guwahati to benefit additional 350,000 residents; and (ii) improve drainage system in Guwahati and Dibrugarh to reduce water logging and flooding. The project will also support (i) capacity development of staff from urban local bodies and implementing agencies; and (ii) community awareness campaigns.