World Bank Approves $800M Loan for Amaravati Integrated Urban Development Program

With India's urban population expected to double to 950 million by 2050, Amaravati is poised to become a model for urban transformation.

The World Bank’s Board of Executive Directors has approved an $800 million loan for the Amaravati Integrated Urban Development Program, a transformative initiative to develop Amaravati into a sustainable, climate-resilient city in Andhra Pradesh. The program aims to create a well-managed urban hub that generates employment and improves living standards, particularly for vulnerable populations.

With India's urban population expected to double to 950 million by 2050, Amaravati is poised to become a model for urban transformation. Currently home to 100,000 residents, the city’s masterplan envisions a population of 3.5 million by 2050, supported by state-of-the-art infrastructure and governance. The first phase of this ambitious development is being jointly supported by the World Bank and the Asian Development Bank.

“This initiative demonstrates how cities can serve as engines of inclusive growth. Amaravati will integrate sustainable infrastructure with community-focused planning to drive economic opportunities for all residents,” said Auguste Tano Kouame, the World Bank’s Country Director for India.

Strengthening City Governance and Economic Growth

The program will establish accountable and transparent city management, with citizen participation as a cornerstone. The World Bank funding is expected to catalyze over $600 million in private sector investment, ensuring the city’s financial sustainability while promoting affordable housing and job creation.

According to Balakrishna Menon and Gerald Ollivier, task team leaders for the program, “Catalyzing private sector investments is crucial to making Amaravati a thriving urban center. The program will pool private sector resources to establish enterprises and build affordable housing, reserving 22% of residential areas for this purpose.”

The initiative aims to generate 50,000 jobs over the next five years in sectors such as construction, agro-processing, clean manufacturing, and services. A targeted skills training program will directly benefit 17,000 individuals, including 10,000 women, to improve access to higher-paying jobs.

Building Green and Climate-Resilient Infrastructure

The World Bank will leverage global expertise to design sustainable urban infrastructure, including:

• A road grid and public transport network.
• Flood-mitigation systems and water/wastewater management.
• Neighborhood-level community facilities, affordable housing, and public spaces.

Smart, green technologies and low-carbon, nature-based solutions will ensure the city’s resilience to climate impacts. The program also includes capacity-building initiatives for disaster management to address climate vulnerabilities.

Social and Economic Impact

The program prioritizes affordable housing and inclusive growth for Amaravati’s less-privileged citizens. The city’s Social and Economic Masterplan highlights its potential to become a major economic hub, benefiting women, youth, and marginalized groups.

By incorporating international best practices, Amaravati will serve as a blueprint for sustainable urbanization, supporting India’s broader goals for climate-resilient growth.

Loan Details

The $800 million loan, requested by the Government of India, will be repaid over 29 years, including a six-year grace period.

The World Bank’s long-standing commitment to India’s development continues with this landmark project, which is expected to reshape Amaravati into a world-class city, driving economic growth and improving the quality of life for its residents.