New Delhi: The World Bank’s board of executive directors have approved the $800 million loan for Amaravati Integrated Urban Development Program aimed at establishing the city as a well-managed, climate-resilient growth center in Andhra Pradesh that generates jobs and improves the lives of its current and future residents, especially the most vulnerable.
Amaravati is part of the Andhra Pradesh capital region, which includes the neighbouring cities of Vijayawada and Guntur. It is situated on the right bank of the Krishna river and southwest of Vijayawada. The city is named after the nearby historic site of Amaravathi adjacent to Dharanikota, which was once the capital of the Satavahana dynasty around two millennia ago.
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“With its urban population expected to double to 950 million by 2050, India aims to build sustainable and livable 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. “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 100,000 people live in the Amaravati area, with the population expected to grow several fold over the next decade. The government has prepared a masterplan for a 217 sq km area that can accommodate 3.5 million people by 2050. The World Bank and the Asian Development Bank (ADB) are supporting the first phase of the city’s development.
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The program will support an accountable and effective city management structure for Amaravati that integrates citizen engagement and participation in city planning and development. Extensive consultation efforts with communities will continue during project implementation. The bank financing will also catalyze more than $600 million in private sector investment to help the city become financially sustainable and provide economic opportunities for its residents.
“Catalyzing investments will be key to making the city work for its residents. The Program will help the government mobilize the private sector to provide affordable housing and establish enterprises that can create quality jobs,” said Balakrishna Menon and Gerald Ollivier, World Bank task team leaders for the Program. “The Amaravati masterplan reserves 22% of the residential area for affordable housing, and the Program will support this including through setting up a fund that can pool in private sector resources.”
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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 support through job-focused skills’ training and other livelihoods support that will create new opportunities. The program will directly train 17,000 people, of which 10,000 will be women, to improve their access to better and higher-paid jobs.
The World Bank will leverage international knowledge in sustainable urban design to build the city’s trunk infrastructure, including a road grid, public transport, and flood-mitigation and water/wastewater systems. The program will also support the development of well-designed neighborhood-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.
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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 6 years.
