NEW DELHI: The World Bank has said it is prepared to lend up to $3 billion over the next three years for the Rs. 1,74,000-crore Bharat Nirman programme for developing rural infrastructure.

The package will, however, be part of the $9-billion assistance the Bank has committed itself to India over the next three years, at $3 billion every fiscal. The multilateral institution doubled its aid package from $1.4 billion to $2.9 billion in 2004-05.

While the Bank is committed to maintaining its annual aid level at $3 billion, the Government will be free to utilise up to $1 billion each year for funding Bharat Nirman programmes over the three-year period, although the Planning Commission pitched for an additional funding up to $1 billion annually for this project.

At a wrap-up news briefing on his four-day India visit, World Bank President Paul Wolfowitz said here on Saturday, "In principle, we want to do more. We will certainly look at what we can do."

Asked whether the Bank would increase its annual aid package to $4 billion, he said: "I don't think it would be possible to scale up at the present juncture as $3 billion is a considerable amount."

Under Bharat Nirman, the Government is set to earmark a major investment for rural infrastructure in six areas: irrigation, drinking water and sanitation, roads, electrification, telecommunication and housing. The Bank has already been active in the first three sectors and approved $1 billion over the last two years.

During their discussions with Mr. Wolfowitz, Prime Minister Manmohan Singh, Finance Minister P. Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia specifically sought greater support in the roads, irrigation and drinking water, and sanitation sectors.

Mr. Wolfowitz told newspersons that the Bank agreed to explore ways of creating a viability gap-financing fund to encourage private-public partnership in infrastructure. This itself would require $100 billion in investment over the next seven years.

Physical infrastructure in power, highways, ports, airports and the Railways required huge funds. As the public sector was unable to generate them, resources would have to be harnessed from the private sector. Hence, the need for the `Viability Gap Fund'.

"Right priority"

Mr. Wolfowitz said: "Infrastructure constraints are an impediment to growth. The Government has rightly made provision of rural infrastructure and investments in hard infrastructure a priority. The World Bank feels privileged to support these efforts."

Its India Country Strategy for 2005-08 was closely aligned with the Government's agenda and included focussed lending for upgrading infrastructure, for improving health and education as well as for generating rural livelihood opportunities.

Mr. Wolfowitz hailed India's efforts at reconstruction in the tsunami-affected areas. Its response "both immediately after the disaster struck and now in the reconstruction phase, has been remarkable. World Bank is proud to be supporting this effort and looks forward to carrying the learning from India to other affected countries."

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