Amaravati Capital Push: Andhra Pradesh Secures Historic Loan

Andhra Pradesh has granted a government guarantee and a letter of comfort to the Capital Region Development Authority (CRDA) to secure a Rs 7,500 crore loan from NaBFID. The funds will support the development of Amaravati, with the CRDA responsible for debt servicing and paying a two percent commission.

In a significant push for the development of Amaravati, the government of Andhra Pradesh has extended a guarantee and issued a letter of comfort to the Capital Region Development Authority (CRDA). The state is facilitating a Rs 7,500 crore loan from the National Bank for Financing Infrastructure and Development (NaBFID).

According to S Suresh Kumar, principal secretary for Municipal Administration and Urban Development, the government decided to back the loan under conditions requiring that the CRDA meets its debt servicing obligations independently. These terms were laid out in a government order released on Friday.

The comprehensive guarantee covers both the principal and interest over the span of the loan. However, it’s activated only if the CRDA fails to fulfill its financial obligations. Additionally, the CRDA is mandated to pay a two percent guarantee commission on the loan amount.