Washington, Dec 11 - The World Bank has approved two projects worth $405 million designed to promote environment friendly modes of urban transport and to improve management and delivery of services in urban areas in Andhra Pradesh.

A $105 million loan for the Sustainable Urban Transport Project (SUTP) will finance capacity building and demonstration projects in select cities that will create models of sustainable transport solutions for Indian cities to replicate.

These projects include public transport development such as new bus systems, and non-motorized transport development including cycle track investments. The project is also supported by a $20.5 million grant from the Global Environment Facility (GEF).

"India's own transport policy puts forward a vision for urban transport that focuses on people, not vehicles, emphasises liveability, and facilitates urban growth," said Roberto Zagha, World Bank country director for India.

"The main goal of SUTP is to support the achievement of that vision by helping create a successful project that can spur a shift toward sustainable urban transport policies and programmes at the state and local level."

Urban growth in Andhra Pradesh, India's fifth most populous state, has accelerated alongside its rapid economic growth. While urban poverty in the state has declined impressively, provision of urban services such as roads, water and sanitation has been falling behind the growing demand, the Bank noted.

A $300 million loan for the Andhra Pradesh Municipal Development Project (APMDP) will finance sustainable, high-priority urban infrastructure projects, which will be selected and implemented by urban local bodies (ULBs).

"The main goal of this project is to help strengthen the capacity of these local self government institutions to enable them to sustain and expand urban services," said Zagha.

The project will also support improvements in the state-level framework that defines ULBs' autonomy, accountability, and incentives for performance, as well as the state government's capacity to monitor ULBs' performances and to provide policy and technical support for their development.

The loan for SUTP from the International Bank for Reconstruction and Development (IBRD) has a 30-year maturity including a five-year grace period. The IBRD loan for APMDP has a 28.5-year maturity including a 6.5-year grace period. (IANS)