Urban growth in India in the 1990s far exceeded the capacity of existing infrastructure and municipal services. Karnataka was one of the most urbanized states, and its capital, Bangalore, was one of the fastest growing metropolitan areas in the country. The state government of Karnataka identified 10 urban centers, along the west coast of the state, as priority areas for infrastructure investment.

The project's targeted impact was increased economic growth in Madhya Pradesh, which was to be realized by improving the state road network, facilitating safe and appropriate road usage, increasing efficiency of transport services, and enhancing the capacity of the Madhya Pradesh government for road asset development and management.

An earthquake with a magnitude of 8.0 struck Wenchuan County on 12 May 2008, which was about 92 kilometers (km) northwest of the Chengdu, the provincial capital of Sichuan, People's Republic of China (PRC). The earthquake affected a wide area, causing extensive damages and heavy losses in Sichuan, Shaanxi, and Gansu provinces, including seven other provinces. The total disaster area covered 500,000 square kilometers, in which the 51 worst-affected counties in Sichuan, Shaanxi, and Gansu provinces covered 130,000 square kilometers.

The project is the first tranche of a multitranche financing facility (MFF) that focuses on reconstructing 222 km of road along the A380 highway and improving planning, project management, logistics, road asset management, and community facilities. The MFF is part of a series of interventions to improve the country's transportation system.

Developing the national grid by constructing transmission lines and distributing facilities were priority investments in the transmission master plan of Electricité du Cambodge (EDC), the state utility responsible for electricity delivery in Cambodia.

The Nam Ngum River Basin is one of the most important river basins in the Lao People's Democratic Republic. However, at the time of project preparation, the basin reservoir was not efficiently managed, resulting in suboptimal hydropower generation and inefficient maintenance of downstream riverine ecosystems. In addition, water quality needed to be monitored closely as agriculture was becoming intensive in the upper basin watersheds.