World Bank, ADB to release Rs 13,600 crore for Amaravati

VIJAYAWADA: The World Bank along with the Asian Development Bank has agreed, in principle, to fund $1600 million (Rs 13,600 crore) for the phase-1 development of Amaravati as a capital city.

According to officials, the two banks will start releasing the amount in January next. The matter was pursued successfully by chief minister Chandrababu Naidu, they said.

The CM had announced that completion of Amaravati capital was his government’s first priority. During his visits to Delhi, Naidu applied pressure on the Central leaders to sanction funds for Amaravati. Before the Union Budget, Naidu met finance minister Nirmala Sitaraman and Prime Minister Narendra Modi and got an allotment of Rs 15,000 crore for Amaravati in the budget.

Teams of WB and ADB visited Amaravati recently to inspect the ground situations before they agreed to release funds.

According to the officials, the total cost of for the phase-I development is Rs 15,000 crore. the Central government will be funding the remaining Rs 1,400 crore, they said, and the total amount from the World Bank should be drawn within five years.

The International Bank for Reconstruction and Development (IBRD), part of the World Bank, which provides loans and guarantees, and ADB will be funding $800 million (`6,800 crore) each for the project. The repayment of the WB and ADB loans will be taken care of by the Centre.

The voluntary LPS (Land Pooling System) pooled 34,390 acres of farmland when Naidu was in power between 2014 and 2019, in exchange for serviced residential and commercial plots and other safety net benefits, for the construction of Amaravati capital.

According to a WB document, the department of economic affairs at the Centre is the borrower, while the Andhra Pradesh capital regional development authority is the implementing agency.

The World Bank was initially interested in the Amaravati capital construction project from 2016 but this did not move forward.