World Bank’s $800 million loan to transform Amaravati into India’s next mega city

"India's urban population is projected to double to 950 million by 2050, driving the need for sustainable and livable cities as centers of growth. Amaravati presents a promising opportunity to showcase this urban transformation," said Auguste Tano Kouame, the World Bank's Country Director for India.

New Delhi: The World Bank’s Board of Executive Directors has approved the $800 million Amaravati Integrated Urban Development Programme, aimed to establish the city as a well-managed, climate-resilient growth centre in Andhra Pradesh that generates jobs and improves the lives of its current and future residents.

“With its urban population expected to double to 950 million by 2050, India aims to build sustainable and liveable cities as growth hubs, and Amaravati offers an exciting opportunity to model this urban transformation,” said Auguste Tano Kouame, the World Bank‘s Country Director for India.

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“The World Bank will bring global expertise to support the design of city institutions and infrastructure that can create economic opportunities for residents, including women, youth and vulnerable groups.”

Currently, about 1,00,000 people live in the Amaravati area, with the population expected to grow severalfold over the next decade. The government has prepared a master plan for a 217 sq km area that can accommodate 3.5 million people by 2050. The World Bank and the Asian Development Bank are supporting the first phase of the city’s development.

“The Bank financing will also catalyse more than $600 million in private sector investment to help the city become financially sustainable and provide economic opportunities for its residents,” according to a World Bank statement.

The city’s Social and Economic Masterplan estimates that Amaravati has the potential to generate 50,000 jobs over the next five years in sectors such as construction, agro-processing, clean manufacturing, and services.

The city’s residents, especially women and youth, will benefit from the World Bank’s support through job-focused skills training and other livelihood support to create new opportunities.

The programme will directly train 17,000 people, of which 10,000 will be women, to improve their access to better and higher-paid jobs, the statement said.

The World Bank will leverage international knowledge in sustainable urban design to build the city’s trunk infrastructure, including a road grid, public transport, flood mitigation and water/wastewater systems.

The programme will also support the development of well-designed neighbourhood-level community facilities and public spaces, in addition to affordable housing for the city’s less-privileged citizens.

It will bring in smart, green technologies and design approaches to make the city more resilient to climate impacts, including through the use of low-carbon and nature-based solutions, and will help build disaster management capacity.

The $800 million loan requested by the Government of India to develop Amaravati as an economic hub and state capital for Andhra Pradesh, has a final maturity of 29 years, including a grace period of six years.