World Bank Releases $340 Million for Andhra Pradesh’s Amaravati Capital City Project

For the Andhra Pradesh capital city project the World Bank has released the $340 million for the development of Amaravati under Phase-I. Additionally the $130-150 million is expected release later in the month of April. It indicate the steady financial support for the state’s ambitious project and this is backed by the  global institutions like World Bank and Asian Development Bank.

World Bank Funding To Amaravati Development

The funding is part of the larger commitment by the World Bank and the Asian Development Bank as they have jointly pledged the,

• $1.6 billion total funding
  $800 million each from both institutions

Along with this the Government of India has also committed ₹15,000 crore and ₹1,400 crore already allocated.

What is Amaravati Integrated Urban Development Program (AIUDP)?

The Amaravati project is set to implemented under the Amaravati Integrated Urban Development Programme (AIUDP) which is using the Program-for-Results (PforR) framework.

Key Features of This Model

• The funds are released based on the achievement of the results
• Also ensures accountability and the efficient utilization
• And encourages the performance-driven development

It means that funding is not time based but results based  and will ensuring better project execution.

Infrastructure and Development Progress

Significant progress has already been made under this program the building the infrastructure in the capital city in the areas of the,

• Urban Infrastructure Development
• Flood Management
• Urban Governance Systems
• Focus on Jobs, Skills, and Inclusivity

The Amaravati project is not just about the infrastructure but it also focuses on the human development.

Loan Terms and Financial Structure

The funding from the World Bank coms with the repayment terms like the,

• Interest rate: Approximately 8 to 8.5% varies from time to time
• Grace period: 6 years
• Total maturity: 29 years
• Repayment start date: June 15th 2031

Question

Q. Consider the following statements about institutions of World Bank Group:

1. The International Finance Corporation (IFC) provides insurance against certain types of risk, including political risk, primarily to the private sector.
2. The International Development Association (IDA) provides various forms of financing without sovereign guarantees, primarily to the private sector.

Which of the statements given above is/are correct?

A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2