The World Bank, in association with Asian Development Bank, has approved in-principle the proposal to extend a loan to the extent of ₹15,000 crore to Andhra Pradesh for the development of Amaravati capital city, people familiar with the matter said on Wednesday.
According to a senior official in the state municipal administration and urban development ministry, the World Bank sent a letter to the Union finance ministry approving the loan of ₹15,000 crore for the Amaravati capital city project for this year.
“The discussions on the modalities of lending will be held between the top officials of the AP capital region development authority (APCRDA) and the World Bank representatives in the presence of the Union finance ministry officials in New Delhi on Thursday,” the official said, adding that the final round of discussions would be held on November 8 and the agreement is expected to be signed by November 15.
The development follows a series of visits by the World Bank team to Amaravati capital region in the last two months. They inspected the ongoing clearance of jungle that came up in the region and abandoned building and other infrastructure works in the last five years, besides interacting with the farmers.
Once the agreement is signed, the APCRDA is expected to get the first tranche of loan of ₹3,750 crore in November, as per the proposals submitted by the APCRDA. The remaining tranches would be released before the closure of the financial year, he said
The World Bank loan would be utilised for the development of infrastructure, development of layouts of residential and commercial plots allotted to farmers who gave away their lands for the capital under land pooling system, construction of Amaravati government complex, including the state assembly, high court, secretariat towers and various departmental buildings.
“The total cost of these works was estimated at ₹49,000 crore of which ₹15,000 crore is being obtained as a soft loan from the World Bank,” the official said, adding that there would be a moratorium of 15 years on repayment of the loan, which would be borne by the centre and the state in the ratio of 90:10
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