Hyderabad: The Telangana government is intensifying its efforts to secure a Rs 4,000-crore loan from the World Bank for the Musi riverfront development project. This is the first time that the Telangana government has sought financial assistance from the World Bank since the state was formed in 2014.
Official sources in the finance department noted that the interest rates charged by the World Bank are comparatively lower than those of commercial banks.
Chief Minister A. Revanth Reddy is on a 10-day visit to the United States to attract investments to Telangana. As part of his itinerary, he will meet World Bank president Ajay Banga in Washington on Wednesday to submit the loan proposal for the Musi project, official sources said.
Chief Secretary A. Santhi Kumari and special chief secretary for finance, K. Ramakrishna Rao, who are accompanying the Chief Minister on his visit, will also participate in the meeting with the World Bank president, the sources added.
These two senior officials are accompanying the Chief Minister for the first time during an international trip, which reflects the importance that the government attached to this meeting.
The previous BRS government borrowed extensively from commercial banks over the past decade, but it did not approach the World Bank. These loans from commercial banks came with higher interest rates, resulting in a significant financial burden on the state exchequer.
The Congress government is paying nearly Rs 7,000 crore per month towards the repayment of principal and interest on the loans taken by the BRS government. To alleviate this financial pressure, Revanth Reddy has decided to seek a World Bank loan at a lower interest rate for the Musi riverfront development project, a key initiative in his administration.
Initial estimates suggest that the Musi project will require a total investment of Rs 60,000 crore. In the recent state Budget, the government had allocated Rs 10,000 crore for the development of Hyderabad of which Rs 1,500 crore was earmarked for the Musi project. The plan is to borrow the World Bank in phases, starting with a Rs 4,000 crore loan.
