The World Bank will provide a loan of $500 million to support the construction of 7,000 km of climate resilient roads under the government's Pradhan Mantri Gram Sadak Yojana (PMGSY).
The government will use green technology to build half of the total road length to be constructed with support from the World Bank.
Sameer Kumar Khare, joint secretary at the department of economic affairs in the Ministry of Finance, on Thursday signed the loan agreement with Junaid Ahmad, country director of the World Bank in India.
"The PMGSY over the years has brought about a paradigm shift in the way rural roads are mapped, designed, monitored and built, involving communities especially women," said Khare.
"The additional finance will bring a new shift in construction technology using green and low carbon designs and climate resilient techniques. Now more rural communities will have access to better economic opportunities and social services," he added.
The World Bank has been supporting the PMGSY since its inception in 2004.
It has so far invested over $1.8 billion in loans and credits mostly in the economically weaker and hill states across North India – Bihar, Himachal Pradesh, Jharkhand, Meghalaya, Rajasthan, Uttarakhand, and Uttar Pradesh.
It has supported building and upgradation of about 35,000 km of rural roads, benefitting about eight million people with access to all-weather roads.
"To support the rural economy and communities and households that depend on rural livelihoods, it will be critical to ensure that infrastructure is built and maintained to withstand climatic changes," said Ahmad.
"This project will demonstrate how climate resilient construction can be integrated into the strategy and planning of rural roads," he added.
Adequate maintenance of the existing 4.6 million km of the road network has emerged as a major challenge.
Many parts of the existing road network are either vulnerable or have already suffered damage from climate-induced events such as floods, heavy rainfall, sudden cloudbursts and landslides.
The new loan from the World Bank will help the government focus on managing the rural road network using green, low-carbon designs and new technologies.