Andhra Pradesh plans to fund Amaravati project through land monetization and multilateral loans
New Delhi: Besides initial funds from multilateral agencies and the Centre, Andhra Pradesh plans to raise finances for the Amaravati capital city project by monetizing the land bank it has created through the voluntary land pooling system in the Guntur district.
“Funds mobilisation through land monetization will be undertaken in the medium to long term,” says the proposal from the AP Capital Regional Development Authority, submitted in August to the Department of Economic Affairs.
The Authority plans to use 34,390 acres of farmland for urban development financing by aligning with and leveraging financing from state and centrally sponsored urban programs. The land bank was created when the present Chief Minister N. Chandrababu Naidu was in power between 2014 and 2019.
Amaravati—envisioned as the ‘People’s Capital of Andhra Pradesh’—aims to be a happy, green, climate-resilient, and inclusive city with the highest standards of livability and infrastructure, supported by a thriving economy.
The proposed infrastructure integrates farmers from 29 villages as development partners under the land pooling scheme, offering better living standards. It is expected to be a livable city by 2050, housing about 3.5 million residents and generating 1.5 million jobs.
“Landowners receive plots and benefits, including annuities, healthcare, free education, skill training, and interest-free loans. Landless farmers are provided pensions and additional skill training. Social infrastructure such as schools, health, and daycare centres are being developed in existing villages,” says the proposal.
The Authority plans to further scale up fundraising through the issuance of bonds by mobilising the Telugu diaspora to invest in green and sustainability-linked bonds. It also plans to leverage public-private partnerships, wherever feasible, for service delivery.
It expects the private sector to invest in commercial, knowledge-based industries, tourism, entertainment, and other employment-oriented and non-polluting activities.
Of the total cost of Rs 15,000 crore for Phase-I development, the Centre will fund Rs 1,400 crore while facilitating loans from the World Bank and the Asian Development Bank of $800 million each. The repayment of these loans will be handled by the central government.
