The World Bank and the Asian Development Bank (ADB) have jointly committed to fund USD 1.6 billion (Rs 13,600 crore) for the development of
Amaravati, the capital city of Andhra Pradesh, in its first phase. A senior official from the Andhra Pradesh government revealed that the release of funds is expected to begin in January 2025, according to PTI.
Of the total estimated cost of Rs 15,000 crore for phase one, the Central government will provide the remaining Rs 1,400 crore. The funds from both the World Bank and ADB will be drawn over a period of five years, with each institution contributing USD 800 million (Rs 6,800 crore). The loan repayment will be handled by the Central government.
"The project is being funded jointly by the World Bank and the Asian Development Bank. The funds will start to be released from January 30, 2025, or possibly earlier. The amount needs to be utilised within five years; otherwise, it will lapse," said the official, speaking on condition of anonymity, as per PTI.
The official further added that the possibility of funding for phase two of the project will depend on how quickly the state government can complete the first phase. Should the first phase progress efficiently, the World Bank may consider stepping in for the second phase as well.
Andhra Pradesh Chief Minister
N Chandrababu Naidu recently stated that the World Bank had agreed to provide Rs 15,000 crore for the first phase of Amaravati's development, with work set to commence in December, according to PTI. Naidu's earlier tenure (2014-2019) saw the voluntary Land Pooling System (LPS), under which 34,390 acres of farmland were pooled for the construction of Amaravati in exchange for serviced residential and commercial plots.
The previous government led by the YSR Congress had proposed a three-capital concept, which did not resonate well with the public. Upon his return to power, Naidu revived the Amaravati capital project, with the Central government assuring support to secure loans from international bodies.
According to a World Bank document, the Department of Economic Affairs at the Centre will be the borrower, while the Andhra Pradesh Capital Regional Development Authority will serve as the implementing agency.
This collaboration with the
World Bank and ADB will not only help bridge financial gaps in Amaravati's initial development but also provide global expertise in urban planning, governance, and infrastructure design, ensuring a holistic and integrated approach to city building. The World Bank had initially engaged with the project in 2016, but the plan did not materialise at the time. This new engagement draws upon previous lessons and the evolving situation surrounding Amaravati's development.
