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The Central government on Monday signed a $96.3 million loan agreement with the Asian Development Bank (ADB) for providing safe drinking water and improving water supply in Himachal Pradesh.

According to a statement issued by the Finance Ministry, the agreement was signed by Additional Secretary in the Economic Affairs Department of the ministry, Rajat Kumar Mishra and Takeo Konishi, Country Director for the ADB in India.

Mishra was quoted as saying by the statement that the project is aligned with the objectives of the government's Jal Jeevan Mission, which aims to provide piped water to all rural households by 2024.

It will also upgrade water supply infrastructure and strengthen institutional capacity to ensure safe and inclusive rural water supply and sanitation services.

"ADB's involvement in the project will provide water management best practices, strengthen institutional capacity, and guide tariff reform," added Konishi.

"These interventions will address the government's aim of providing uninterrupted pressurised water supply to households, inclusive sanitation services, strengthening operation and maintenance for sustainable service delivery, and building capacity of relevant staff," he further said.

More than 90 per cent of Himachal Pradesh's rural population has access to drinking water but the water supply infrastructure needs revamping, to result in efficient and improved service quality, the statement added.

The ADB project will connect 75,800 households to the service, providing uninterrupted water supply to about 3,70,000 residents across 10 districts of the state, it informed further.