IFC, GVMC Sign Pact To Develop Madhurawada Sewerage System; Cost Cited At Rs 553 Crore
The signing was done in the presence of Chief Minister N. Chandrababu Naidu at the state secretariat on Monday.
Vijayawada: The International Finance Corporation, which is a member of World Bank Group, and the Greater Visakhapatnam Municipal Corporation have signed a pact to develop the Madhurawada Sewerage System at an estimated cost of Rs 553 crore.
The signing was done in the presence of Chief Minister N. Chandrababu Naidu at the state secretariat on Monday.
The IFC announced a landmark commitment of up to Rs 498 crore in rupee-denominated non-convertible debentures, to the GVMC. This is the first-ever direct municipal financing by the IFC in India and the first instance of a development institution extending investment to an Indian city without a sovereign guarantee.
The project aims at revolutionizing the sanitation infrastructure in one of Visakhapatnam's most-rapidly urbanising regions.
Municipal administration principal secretary Suresh Kumar said the collaboration with the IFC would be a transformative step not just for Visakhapatnam but for urban India as a whole. “When Indian cities are financially disciplined and administratively progressive, it would help the nation attract global investments without sovereign guarantee,” he said.
He said that the Madhurawada project would be more than a sewerage system. It would represent a forward-looking model of sustainable urban growth, resilience and self-reliance. “The government’s vision would be to create a city that is not only cleaner and healthier but also one that would set a precedent for other cities aspiring to modernise themselves.
IFC managing director Makhtar Diop said, “When cities have the vision to lead, innovative financing could be a catalyst for massive urban transformation. Our partnership with GVMC shows how municipalities can mobilise private capital to deliver essential services. 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.”
The Madhurawada zone is witnessing a large-scale vertical residential development, as also the growth of IT and digital economy clusters and establishment of premier educational and healthcare institutions. With nearly 2.5 lakh people residing in this zone, the absence of a comprehensive underground sewerage system posed severe challenges like discharge of untreated waste water into natural streams and water bodies. This is increasing public health risks, environmental degradation and urban flooding risks due to unregulated sewage flows during monsoons.
To address these issues, the Madhurawada sewerage project has been designed. The state-of-the-art integrated sanitation network covers the entire population and future growth for the next three decades.
While the project has a sanctioned cost of Rs 553 crore, it also will get an IFC loan of Rs 498 crore, AMRUT 2.0 assistance of Rs 45.64 crore and a GVMC contribution of Rs 9.36 crore.