The World Bank has disbursed USD 340 million towards the first phase of Amaravati’s development as the capital city of Andhra Pradesh, with another USD 150 million expected later this month, according to officials. The release marks a key milestone in one of India’s largest greenfield urban development projects, jointly supported by the World Bank and the Asian Development Bank (ADB) with a combined commitment of USD 1.6 billion.
The funding falls under the Amaravati Integrated Urban Development Program (AIUDP), which uses a Programme for Results framework, linking financial disbursements to specific project milestones. The World Bank approved an USD 800 million loan in December 2024, and ADB committed USD 788.8 million separately. The central government has also pledged Rs 1,400 crore for the project’s first phase.
An initial tranche of USD 207 million was released in March 2025, enabling the state government to begin key infrastructure and flood management projects while also establishing an Environmental and Social Management Unit for oversight. Subsequent tranches are released only after 75 percent of the previously allocated funds have been utilized, ensuring accountability and steady progress across project phases. The funds are being deployed to strengthen urban governance institutions and develop essential infrastructure, including arterial roads, water supply systems, sewerage networks, stormwater drainage, and housing. Meanwhile, substantial progress has been achieved in flood management, with approximately 35 percent of this component already completed.
The World Bank loan carries a 29‑year maturity and a 6‑year grace period, with repayment scheduled to begin from June 15, 2031. Disbursements are structured under the Program for Results (PforR) framework, which links fund releases to the achievement of predefined institutional and infrastructure milestones rather than a fixed calendar schedule.
Currently, works worth more than Rs 51,000 crore are underway across Amaravati. Chief Minister N. Chandrababu Naidu has recently accelerated oversight of the project, with site reviews and coordination with financing agencies. A World Bank and ADB delegation that visited Amaravati in early April commended the pace of construction and noted its potential to become a major economic growth engine for Andhra Pradesh.
The programme envisions building a climate-resilient, inclusive city that promotes employment opportunities and integrates sustainability into its planning. About 22 percent of residential land is reserved for affordable housing. The World Bank expects the project to attract more than USD 600 million in private investment as Amaravati evolves into a self-sustaining urban hub in southern India.
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