Tripartite negotiations for DPL from May 27

The World Bank’s upcoming talks with Kerala government and Department of Economic Affairs of the Union government on May 27 and 28 in New Delhi will be to secure its development policy loan (DPL) of $150 million for the Rebuild Kerala Initiative.

At the two-day meeting at the WB office in the national capital, the terms and the repayment conditions will be worked out by the officials to ink an agreement for the first tranche of the DPL. Though the State has been granted project-specific loans for building up infrastructure, it is the first time that WB is offering DPL.

The long-term DPL of $150 million of WB is to be equally provided by the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD). The IBRD is the main multilateral development bank in the world.

Since the DPL is not project-specific aid, the WB authorities will be insisting on stern conditions for providing the financial assistance. Unlike in the case of the project-specific financial aids, there will be no monitoring from the WB for the DPL.

The aid will be made available to the State exchequer once it gets approved and the State could use the money for achieving targets set under the Rebuild Kerala Initiative. WB sources told The Hindu that the State had already identified eight key sectors, including water resources, agriculture, roads, and urban affairs, and had submitted the formulated ‘prior actions’ to the WB. The State would have the freedom to choose the sector in which the financial aid would be used.

Zero or very low interest charge, long-term repayments, including a five-to-10-year grace period or moratorium, are the highlights of the DPL the State is to receive. “In fact, the DPL to be granted by WB is a lottery for the State facing crisis. The State is also trying for second tranche of $200 million DPL in October,” he said.

Once the negotiations are completed and the agreement is finalised in New Delhi, the Board of Governors of World Bank have to approve the DPL. The WB is aiming to provide the first tranche by June end.


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