World Bank will provide credit worth of 60 million US dollar to the government for capacity building of urban local bodies, ULBs in the country. The project aims to improve skills of local bodies for better urban management, thereby reducing poverty.

According to an official release, an agreement to this effect was signed in New Delhi on Thursday between the World Bank and the Department of Economic Affairs, Ministry of Finance.

This will help states and at least 20 ULBs in the initial phase to improve systems for financial management, urban planning, service delivery and better governance. Besides, it will provide support at the central and local levels for policy formulation, implementation and monitoring, in the area of urban poverty alleviation.

Through this project, the Centre will set up a Challenge Fund which will recognise innovative practices by ULBs on urban poverty alleviation. The credit will come from the International Development Association-IDA, which is World Bank's concessionary lending arm.

The maturity period will be for 25 years, including a five-year grace period.