The World Bank has approved a $39.5 million loan to Karnataka for assisting the State Government's urban water supply plans. The project will benefit about 200,000 residents in the cities of Gulbarga, Belgaum and Hubli-Dharwar. It is also expected to encourage policy reforms in the water supply sector. The loan "will enhance the efficiency, management, and delivery of water supply and sanitation to the state's urban residents', a Bank spokesman said. "The urban water sector in Karnataka suffers from chronic inefficiencies, including unreliable service quality, and limited coverage,' according to Mr Oscar Alvarado, the World Bank's task manager for this project.