New Delhi: World Bank will give $ 542 million to India for two projects in quake-hit Gujarat and Karnataka.

The loan, funded by International Development Association (IDA), would be without any interest obligation for a period of 35 years, with an annual service charge of 0.75 per cent.

The agreement to this effect was signed by the bank's country director Edwin R Lim and Adarsh Kishore, Additional Secretary in the Department of Economic Affairs.

Of the $ 542 million, Gujarat Emergency Earthquake Reconstruction Programme (Phase II) would get $ 442.80 million and Karnataka Community Based Tank Management Project would $ 98.90 million.

The Gujarat package would help reconstruction of houses in rural and urban areas, repair and strengthen damaged public buildings, roads, bridges, dams and irrigation infrastructure and reinforce undamaged government buildings and important public buildings as schools, hospitals and fire stations in the earthquake zones.

Government had earlier entered into agreement with World Bank for reallocating $ 400 million for existing IDA/IBRD projects in March 2001 after the massive quake in Gujarat.

With the assistance, the Karnataka project that proposes to cover 2,000 existing tank system in the state, would demonstrate the viability of a community-based approach to tank management.

Of the total expenditure, 72 per cent would go for the improvement of tank systems, 18 per cent for strengthening community development and 10 per cent for establishing an enabling environment for tank development.

PTI