World Bank Approves $245m to Rebuild Disaster-Hit Himachal Pradesh

The World Bank has approved $245 million in financing to help 2.3 million people in India's Himachal Pradesh rebuild stronger infrastructure and create more resilient livelihoods following devastating extreme weather events.

The funding will support the Resilient Action for Development and Disaster Recovery Himachal Pradesh Project, aimed at accelerating post-disaster recovery while reducing the impact of future climate-related shocks.

$1 Billion in Losses from Extreme Weather

Himachal Pradesh has suffered an estimated $1 billion in losses due to extreme weather over the past three years.

Heavy rainfall during the 2023 and 2025 monsoon seasons caused:

• Loss of lives

• Widespread destruction of housing and infrastructure

• Disruptions to schools, markets, and employment

• Damage to water supply and sanitation systems

• Setbacks to agriculture and horticulture production

The mountainous state has become increasingly vulnerable to landslides, flooding, and infrastructure collapse as climate risks intensify.

Rebuilding Stronger, Not Just Restoring

The project will go beyond reconstruction by embedding resilience into infrastructure design and planning.

Key components include:

• Rehabilitation of more than 250 bridges, roads, and footbridges

• Stabilisation of vulnerable slopes

• Restoration of transport, energy, water, and sanitation systems

• Hazard and risk analysis for future-proof planning

• Establishment of resilience-focused institutional units

More than one million people are expected to benefit directly from infrastructure improvements.

"Smart development that builds resilience and creates jobs can help countries drive long-term growth even in the face of extreme weather events," said Paul Procee, Acting Country Director, World Bank India.

"By investing in sustainable infrastructure that connects people to opportunities, this project will help Himachal Pradesh build back better."

12,000 Jobs and Support for Community Businesses

A major focus of the programme is strengthening livelihoods through community-owned enterprises.

The project will:

• Support 12,000 people with new or improved jobs

• Expand opportunities in farming, handicrafts, and rural tourism

• Improve market linkages for artisans, producers, and farmers

• Benefit more than one million women through improved access to services and economic opportunities

By linking recovery with income generation, the initiative aims to reduce long-term vulnerability.

$100m in Private Capital Mobilised

In addition to the $245 million financing package, the project is expected to mobilise $100 million in private capital toward disaster-risk financing and insurance solutions.

The programme will be delivered in partnership with:

• Agence Française de Développement (AFD) to strengthen early warning systems

• The Coalition for Disaster Resilient Infrastructure (CDRI) to provide global expertise on sustainable reconstruction

"This project is about recovery today and safety tomorrow," said task team leaders Anup Karanth and Melanie S. Kappes.

"Through hazard and risk analysis and the establishment of resilience cells, the project will connect communities, protect livelihoods, and reduce future disaster impacts."

Long-Term Financing Structure

The $245 million financing package has a 16-year maturity, including a 3.5-year grace period, providing long-term fiscal flexibility as the state rebuilds.

With climate risks intensifying across South Asia, the project positions Himachal Pradesh as a test case for integrating disaster recovery, resilience planning, and inclusive economic development into a single coordinated framework.