World Bank ends financing of Amravathi project as Delhi backs out
19 Jul 2019
The World Bank is reported to have withdrawn $300 million of funding support for the new capital of Andhra Pradesh after the central government withdrew support for the project.
The Beijing-backed Asian Infrastructure Investment Bank (AIIB), that was due to finance $200 million of the $500 million funding for the project, said it too was reviewing its involvement.
The brainchild of former Andhra Pradesh chief minister N Chandrababu Naidu, construction of the city, known as Amaravati, slowed down after he lost power in the May elections.
The two banks were due to provide the lion’s share of the $715 million cost of critical funding for transport, sanitation and water supply.
Prime Minister Narendra Modi laid the foundation stone for the project in 2015, but, after Naidu’s party broke away from the BJP-led coalition NDA, the BJP decided to withdraw support for Naidu’s ambitious programme.
“The government of India has withdrawn its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project,” Reuters quoted Sudip Mozumder, a New Delhi-based spokesman for the bank, assaying.
“The World Bank’s Board of Executive Directors has been informed that the proposed project is no longer under preparation following the government’s decision.”
Reuters said AIIB spokeswoman Laurel Ostfield in Beijing also said it was aware of the fact that the World Bank has dropped the project from its investment pipeline.