World Bank and Asian Infrastructure Investment Bank (AIIB) Pull out of Amaravati Capital City Project!

Two multilateral banks pulling out of a project – that’s a first in India!

Amaravati Capital City project, plagued with socio-economic damages, land transactions affecting thousands of agricultural, coastal, and pastoral labourers, tenants, landless families, dalits who have undergone severe pressure and fear due to the land acquisition and displacement process, financial non-viability, massive land-grabbing of the fertile land in the name of voluntary land-pooling were raised time and again with the government and both AIIB and World Bank by affected communities, people’s movements and civil society organisations.

The violations are too glaring that nobody could hide or ignore – not even the financial institutions.

A victory of people’s collective campaign at different levels, despite intimidation and threats from the administration, this stands as a symbol of steadfastness of communities, solidarity among different CSOs and multiple levels of interventions.

Read Press Notes:
World Bank Pulls Out of Amaravati Capital City Project (July 18, 2019)
After the World Bank, Asian Infrastructure Investment Bank Pulls Out of Amaravati Capital City Project (July 23, 2019)

Key Media Coverage:
Mint: World Bank pulling out of Amaravati capital project
Economic Times: World Bank drops its $300 mn promise for Amaravati project
NDTV: World Bank ‘Drops’ $300 Million Amaravati Project
Indian Express: World Bank drops $300 million in funding for Amaravati Capital City project
Times of India: World Bank refuses to fund Amaravati infrastructure projects
Hindustan Times: World Bank drops plan to lend $300 mn for new Andhra Pradesh capital Amravati
Business Standard: World Bank decides not to fund project to build AP’s new capital Amaravati
NDTV: China-Backed Bank Drops $200 Million Loan For Amaravati Project
The New Indian Express: Asian Infrastructure Investment Bank pulls out of Amaravati funding after World Bank snub
Mint: Asian Infrastructure Investment Bank withdraws funding to Amaravati project
Economic Times: After World Bank, China-led development bank pulls out of Amaravati project
The News Minute: After World Bank, China-based AIIB drops $200 million loan for Amaravati

More: Media Coverage

The proposed capital city project of Amaravati, the new capital of State of Andhra Pradesh covers an area of 217.23 sq. km with the seed capital in an area of 16.94 sq. km while the entire capital region pans over a spread of 8352.69 sq. km across both Krishna and Guntur districts of the State of Andhra Pradesh. The city specifically is planned to be built in Guntur district on the banks of the Krishna River, which is hailed as the rice-bowl of the State with 120 multi-crops irrigated on the floodplains. The area sited for the city presently has a population of 1.03 lakh while that of the entire capital region would be 5.8 million.

Global Financiers: The project is under consideration to be financed by both World Bank and AIIB. The total project cost is envisioned to be $715 million, of which the total Bank support is $300 million through IBRD investment project financing. The preparatory work for the project is being financed through a Bank-executed trust fund’ TFOA2879 – Support to Andhra Pradesh Sustainable Capital City Development’ with a grant amount of $0.17million. There’s a 12.2% disbursement from this trust fund as of the receipt of the Request. The Government of Andhra Pradesh (GoAP) as the Borrower is providing US$ 215 million, and the Asian Infrastructure Investment Bank (AIIB) is considering financing US$200 million.

Problems posed: This project has garnered much attention in the country owing to the massive land acquisition and ‘voluntary land pooling’ scheme [LPS]. The farmers allege harm to their livelihoods, environment, and food security, along with lack of consultation and participation of affected people. Complaints and requests for inspection were sent to the Inspection Panel (accountability mechanism of World Bank) during December 2016 and May 2017, and registration of the complaint was notified to the public (IPN-Request No. RQ 17/04). Further investigation is demanded by the people and complainants into Bank’s non-compliance with its operating policies [OP/BP 4.01 – Environmental Assessment, OP/BP 4.04 – Natural Habitats, OP/BP 4.11 – Physical Cultural Resources, OP/BP 4.12 – Involuntary Resettlement, OP/BP 4.36 – Forests].