MUMBAI: The state government on Tuesday approved an ambitious road improvement project to modernise key transport corridors across the state, to accelerate Maharashtra’s economic ambitions.Mumbai, India - February 25, 2026: A view of an under-construction road near Rustom Sidhwa Marg, Fort, in Mumbai, India, on Wednesday, February 25, 2026. (Photo by Bhushan Koyande/Hindustan Times)The state cabinet cleared the Maharashtra Road Improvement Project, securing financial assistance worth $2 billion from two global lending institutions — Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB).The project has been pitched as a step towards Maharashtra’s goal of becoming a “one-trillion dollar economy”. Together, both phases will cover 3,000km and are expected to cost ₹12,442 crore.“Priority will be given to high-growth transport corridors, carrying traffic volumes of over 5,000 passenger car units where commercial vehicle movement exceeds 40% and has been identified by the state government,” said a senior official from the state public works department (PWD). The move is expected to significantly improve mobility across major economic, industrial, agricultural, and commercial routes, the official said.The AIIB and NDB will each provide $1 billion in two phases, aimed at upgrading roads across a three-year period beginning 2025–26. In the first phase, each institution will provide $500 million, while the state government will contribute $215 million, taking the estimated project cost for each institution-backed phase to around $715 million ( ₹6,221 crore), against expenditure of ₹12,442 crore across both phases, according to a statement issued by the chief minister’s office (CMO).In the first phase, the state public works department (PWD) will upgrade roads spanning 1,500km. The projects will involve competitive bidding under the Engineering, Procurement and Construction (EPC) model.“Initially, the state government will fund the works through budgetary allocations. Once financing agreements are completed, expenditure will be reimbursed by the multilateral agencies,” revealed another official.Rural roads project In a push to strengthen rural connectivity, the state cabinet on Tuesday approved a ₹6,429-crore project to upgrade 3,500km of roads and bridges under phase-3 of the Mukhyamantri Gram Sadak Yojana (Chief Minister’s Rural Roads Scheme) with financial assistance from the AIIB.The AIIB will provide a loan of around $500 million ( ₹4,500 crore), covering nearly 70% of the project cost, while the state government will contribute the remaining 30%, amounting to $215 million ( ₹1,929 crore).“The AIIB loan, including principal and interest, will be repaid over a 25-year period, with a five-year grace period,” said a PWD official.