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APCRDA to sign agreement with World Bank, ADB for Amaravati capital city loan
While the World Bank and Asian Development Bank will extend funding support of US $800 million each, the remaining amount will be covered by the state government with support from the Centre
In yet another step towards construction of Andhra Pradesh capital city of Amaravati, senior officials of the AP Capital Region Development Authority (APCRDA) on Tuesday held negotiations with the representatives of the World Bank and the Asian Development Bank in New Delhi to sign an agreement for securing a loan of US $1.786 bn ( ₹15,000 crore) for the project, people familiar with the matter said on Tuesday.
The project, “The Amaravati Inclusive and Sustainable Capital City Development Program”, has been approved by the World Bank after a series of negotiations and the latter had communicated the same to the state government through the Department of Economic Affairs on September 11.
While the World Bank and the Asian Development Bank will extend funding support of US $800 million each (a total of US $1.6 billion or ₹13,500 crore), the remaining amount will be covered by the state government with support from the central government.
“The final talks are being held and the agreement will be signed in New Delhi by Wednesday,” an official privy to the development said.
On Sunday, the state government issued an order designating APCRDA as an implementing agency on behalf of the government and sign the project agreement with lending agencies. The APCRDA commissioner will take all necessary steps and actions for securing financial assistance from these lending agencies for the development of Amaravati capital city, the order said.
The loan obtained from the World Bank and the ADB will be spent on various works, including construction of trunk roads and utility ducts for essential services, stormwater drainage and flood mitigation by development of streams, retention reservoirs and flood defence system, development of roads, utilities, green spaces in land pooling system (LPS) zones, provision of round-the-clock clean water supply system, creation of sewerage system, including treatment plants, construction of key public buildings using green standards, institutional strengthening and capacity building and raising finances through Innovative financing methods.
The state government has asked APCRDA commissioner to create a separate budget head along with allocation and periodic transfer of funds from the lending agencies to the current account of APCRDA as per programme framework.
Interestingly, the state government, for the first time after five years, allocated ₹3,445.33 crore for Amaravati capital city in this year’s annual budget presented in the state assembly on Monday.
While ₹3,000 crore will be spent on creating infrastructure in the capital city, ₹400 crore was allocated for payment of annuity to farmers who had given away their lands to the government under land pooling system for Amaravati.
“Of the remaining amount, ₹32 crore will be spent under the Amaravati Smart Cities programme and ₹13.33 crore for providing amenities in the high court building,” the budget document said.
Last month, the Housing and Urban Development Corporation Ltd (HUDCO), a central government enterprise, also agreed to extend a loan of ₹11,000 crore for the construction of the capital city.
A delegation of HUDCO, led by its chairman and managing director Sanjay Kulshreshtha, met chief minister N Chandrababu Naidu on October 25 to discuss the proposal to lend ₹11,000 crore for the construction of Amaravati capital city.
“The state government is planning to mobilise another ₹23,000 crore through other forms, including loans and bonds, besides grants from the central government over a period of time to complete Amaravati capital city works in the next three years,” the official quoted above added.
