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The World Bank and Asian Development Bank (ADB) have agreed in principle to provide INR 13,600 crore (USD1600 million) for the first phase of Amaravati city's development. The Andhra Pradesh government confirmed that the funds will be released starting in January 2025, with the remaining INR 1,400 crore funded by the Central Government. This financial commitment is poised to drive the development of the Amaravati Capital City (ACC) project, bringing global expertise in urban planning, infrastructure, and governance.
In a major boost to the development of Amaravati, the World Bank and Asian Development Bank (ADB) have committed to funding INR 13,600 crore (USD1600 million) for the first phase of the city's capital development. According to a senior official from the Andhra Pradesh government, the funds will be released starting from January 2025. The total cost for Phase-I is INR 15,000 crore, with the Central government providing the remaining INR 1,400 crore. The official highlighted that the loans provided by the International Bank for Reconstruction and Development (IBRD), a part of the World Bank, and ADB will amount to USD 800 million (INR 6,800 crore) each. Inside sources claim the project funding will be drawn over five years, with the loans' repayment being handled by the Centre. Advertisement
Phase-II of the project hinges on the completion speed of Phase-I, with the World Bank potentially offering further support if progress is swift. This multi-phase project, led by Andhra Pradesh Chief Minister N Chandrababu Naidu, is vital to transforming Amaravati into a greenfield capital city. Naidu's government has rejuvenated the city project after a period of uncertainty under the previous government's three-capital concept, which failed to gain popular support. Naidu's previous initiative, the Land Pooling System (LPS), successfully secured 34,390 acres of farmland for the construction of the capital, exchanging land for serviced residential and commercial plots along with other benefits.
The World Bank had initially engaged with Amaravati's development in 2016, though the project stalled. Now, the re-engagement draws from the lessons of the previous attempt. According to a World Bank document, the Department of Economic Affairs at the Centre is the borrower, while the Andhra Pradesh Capital Regional Development Authority (APCRDA) is the implementing agency. The support from both the World Bank and ADB is seen as pivotal, not just in providing the necessary financial backing but also in bringing global expertise and technical support to help the state develop the capital in a holistic and integrated manner.
The project promises to be a game changer for Andhra Pradesh, offering expertise in urban planning, municipal governance, and infrastructure delivery. The renewed efforts, backed by multilateral agencies, are poised to propel Amaravati's transformation into a world-class capital city, with the potential to attract investment and boost regional development.
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