AP inks MoU with IFC for a loan of Rs.498 crore to fund GVMC's sewerage project

The State Government on Monday signed a MoU with International Finance Corporation (IFC) for a loan of Rs.498 crore to Greater Visakhapatnam Municipal Corporation (GVMC) for a comprehensive sewerage system in upmarket Madhurawada Zone-2.

The tenure of the loan is 15 years including a 3 years moratorium on principal payment and 12 years of repayments, with an interest rate of 8.15% per annum floating interest rate.

The MoU was entered into at Amaravati after administrative approval in June for taking up the project at a cost of Rs.553 crore by GVMC, the largest urban civic body in Andhra Pradesh.

The MoU signing ceremony was attended by S. Suresh Kumar, Principal Secretary, MA&UD Department, Dr. P. Sampath Kumar, Commissioner & Director of Municipal Administration, Ketan Garg, Commissioner, GVMC, Victoria Delmon, Manager – Infrastructure, IFC (Asia Pacific), Neeraj Gupta, Principal Investment Officer and Cities Lead, IFC India, Abhishek Gupta, Associate Investment Officer & GVMC Loan Project Leader, Sameer Trikha, Catalyst Trusteeship and Jeetu Tolani, Cyril Amarchand Mangaldas.

Earlier, the State Government had accorded sanction vide GO.Ms.No.92, MA&UD(UBS) dated 09.06.2025 with a project cost of Rs 553 crore and permitted GVMC to avail loan from IFC towards the project.

This is India’s first-ever direct IFC financing for a municipal corporation highlighting Andhra Pradesh’s leadership in pioneering innovative financing for urban infrastructure. This is a path-breaking development in India’s municipal finance landscape.

A GVMC official said this is also for the first time a global development finance institution has trusted a city corporation without a sovereign guarantee demonstrating GVMC’s creditworthiness, fiscal discipline, and governance strength. This sets a national precedent –showing how Indian cities can directly access global capital markets.

•Madhurawada is one of Visakhapatnam’s fastest growing corridors, housing nearly 2.5 lakh people. Challenges faced include untreated wastewater, public health risks, groundwater pollution and urban flooding. The project aims at achieving a100% underground sewerage network, advanced pumping & lift stations, modern wastewater treatment plant with reuse & recycling and a long-term capacity for 30 years of population growth.

Once completed the project is expected to reduce waterborne diseases, cleaner drains, groundwater & coastal waters and climate resilience with flood management, reduced methane emissions. The project is expected to fetch higher land values, private sector investments, job creation and ensure a cleaner, safer and a more livable city.