World Bank Releases Major Funds for Amaravati Development

Construction works for Andhra Pradesh’s capital, Amaravati, are gaining momentum with support from international financial institutions. The World Bank has so far released $340 million (approximately ₹3,000 crore) for the first phase of the capital’s development, a senior official confirmed. In addition, another $150 million (around ₹1,396 crore) is likely to be disbursed to the state government by the end of April.

For Phase-1 development of the capital, the World Bank and the Asian Development Bank (ADB) are jointly extending financial assistance of $1.6 billion , with each institution contributing $800 million . According to a senior state government official, around $130–150 million is expected to be released by the two institutions during April. The interest rate on these loans is likely to range between 8% and 8.5% , depending on international market fluctuations. Meanwhile, of the ₹15,000 crore assured by the Central government, an initial ₹1,400 crore is expected to be released shortly.

The funds are being provided under the Amaravati Integrated Urban Development Programme through a results-based financing model . This means disbursements are not tied to fixed timelines but depend on the achievement of predefined milestones and the pace of development works.

The loan taken for Amaravati’s development comes with a 29-year repayment period , including a 6-year grace period during which no repayments are required. Repayments will commence from June 15, 2031 .

Currently, key infrastructure works including major roads, drinking water supply, sewerage systems, and housing complexes are progressing rapidly. Notably, works aimed at flood mitigation have already been 35% completed .

Beyond infrastructure, the government is also utilising these funds to conduct skill development programmes for local women and youth, creating employment opportunities. Officials reiterated that the World Bank and ADB will continue to provide technical expertise and global best practices to help transform Amaravati into a climate-resilient, world-class city .