New Delhi: In a first-ever municipal funding, the International Finance Corporation, a World Bank Group arm, has announced a commitment of up to USD 60 million (about Rs 498 crore) in rupee-denominated non-convertible debentures of the Greater Visakhapatnam Municipal Corporation to transform sanitation infrastructure.
To this effect, a formal agreement was signed on Monday at the Andhra Pradesh Secretariat between the International Finance Corporation (IFC) and Greater Visakhapatnam Municipal Corporation (GVMC), marking a path-breaking development in India's municipal finance landscape.
This is the first-ever direct municipal financing by IFC in India, and also the first instance of a development finance institution extending investment to an Indian city without a sovereign guarantee, a joint statement said.The development signals a new era of municipal creditworthiness, showcasing how financially disciplined and progressive urban local bodies (ULBs) can attract global capital for critical infrastructure projects, it added.
The investment is directed towards the Madhurawada Sewerage System Project, which aims at transforming sanitation infrastructure in one of Visakhapatnam's most rapidly urbanising regions, it said. Andhra Pradesh Principal Secretary Municipal Administration & Urban Development Department S Suresh Kumar said, "Our vision is to create a city that is not only cleaner and healthier but also sets a precedent for other cities aspiring to modernise with global standards of financing and governance".
Announcing the landmark collaboration, IFC managing director Makhtar Diop said, "Our partnership with Visakhapatnam shows how municipalities can mobilise private capital to deliver essential services affordably and sustainably, from wastewater and sanitation to transport and solid waste management, without sovereign guarantees.
This first-of-its-kind municipal financing will help protect the city's coastline, create jobs, and set a new benchmark for resilient, low-carbon growth, he said, adding that it is a testament to the World Bank Group's commitment to help cities leverage limited public funds to attract global private investment.
What India is pioneering today can inspire cities everywhere to build cleaner, more resilient, and future-ready urban spaces, he added.The entire project cost is Rs 553 crore. Of this, the central government contribution would be Rs 45.64 crore through Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and GVMC would contribute Rs 9.36 crore from its internal accruals, the statement said.
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