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Andhra Pradesh's Municipal Administration and Urban Development Minister P. Narayana said the state has already initiated urban infrastructure works worth over INR 20,000 crore and is preparing an additional project pipeline valued at INR 14,400 crore under the central government's Urban Challenge Fund (UCF). Speaking at a UCF workshop for municipal commissioners in Vijayawada, Narayana said Andhra Pradesh has been allocated INR 3,600 crore in grant assistance under the scheme, with the state eligible to mobilise a further INR 10,800 crore through institutional borrowings and other funding sources.
Andhra Pradesh's Municipal Administration and Urban Development Minister P. Narayana said the state has already initiated urban infrastructure works worth over INR 20,000 crore, with an additional project pipeline valued at INR 14,400 crore currently being prepared under the central government's Urban Challenge Fund.
Narayana was speaking at a UCF workshop for municipal commissioners held in Vijayawada, attended by HUDCO Chairman Sanjay Kulshrestha. He said the Centre had established the Urban Challenge Fund with a total corpus of INR 4 lakh crore to support urban development projects across the country, and that Andhra Pradesh had been allocated INR 3,600 crore in grant assistance under the scheme based on population, with the state additionally eligible to mobilise INR 10,800 crore through institutional borrowings and other funding sources.
He said municipalities in the state currently had the capacity to raise around INR 5,000 crore in loans, which would attract a further INR 1,250 crore under the UCF framework, taking the total funds available through this route to INR 6,250 crore.
Narayana also said the government was moving ahead with a separate INR 5,000 crore package under an annuity model approved by the state's Finance Department. Under this arrangement, implementing agencies would invest 60 per cent of project costs, with the government contributing the remaining 40 per cent, and repayments spread over ten years. The state's contribution under this model is expected to be supported through revenues generated via the Layout Regularisation Scheme and Building Penalisation Scheme.
The minister advised municipal commissioners to prioritise drainage requirements in densely populated localities over projects driven by political requests, stressing that public necessity should remain the primary criterion guiding project selection. He also addressed allegations that municipalities were being privatised through the UCF mechanism, dismissing the claims.
The latest UCF-linked announcement builds on a broader urban infrastructure push in the state. The government has separately sanctioned INR 7,469.46 crore for a programme covering roads, drainage, parks, street lighting and central medians across the state's 123 Urban Local Bodies, comprising INR 5,500 crore in capital works and INR 1,969.46 crore towards interest over ten years under the Hybrid Annuity Model. That programme is aimed primarily at closing the state's remaining 4,388-kilometre urban road gap, out of a total assessed urban road network of 25,626 kilometres, of which 21,238 kilometres, or 82.9 per cent, has already been upgraded.
According to the state government, the wider urban infrastructure pipeline across Andhra Pradesh's 123 Urban Local Bodies now stands at approximately INR 40,743.67 crore. Of this, 514 projects worth INR 15,274.21 crore are under implementation through AMRUT 2.0, the Asian Infrastructure Investment Bank, and the Urban Infrastructure Development Fund, while a further INR 25,469.46 crore is being taken up through the Urban Infrastructure Development Fund, the Urban Challenge Fund, and the Hybrid Annuity Model. This broader figure excludes close to INR 80,000 crore of infrastructure projects separately under implementation in the Capital Region Development Authority region around Amaravati.
The report did not specify a completion timeline for the INR 20,000 crore of works already initiated under the Urban Challenge Fund, nor did it provide a district-wise or municipality-wise break-up of the allocated and pipeline funding.
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