Vijayawada: In a landmark deal for urban development in India, the International Finance Corporation (IFC) has committed up to $60 million (Rs 498 crore) in a first-of-its-kind direct municipal financing to the Greater Visakhapatnam Municipal Corporation (GVMC). This investment, formalised through an agreement signed on Monday, marks the first time an Indian city has received a direct loan from a development finance institution without a sovereign guarantee.
The funding will support the Madhurawada Sewerage System Project, a modern sanitation network designed to address critical infrastructure needs in one of Visakhapatnam’s fastest-growing regions. The project aims to improve public health, protect coastal environments, and build climate-resilient infrastructure.
“This collaboration with IFC is a transformative step not just for Visakhapatnam but for urban India as a whole,” said S Suresh Kumar, Principal Secretary of Municipal Administration and Urban Development. “It signals that Indian cities, when financially disciplined, can attract global investments on their own merit.”
The project, with a total cost of Rs 553 crore, will establish a state-of-the-art sewerage system, including an extensive network of pipelines, pumping stations, and a modern wastewater treatment plant. It is designed to serve the region’s current population and handle growth for the next three decades.
Makhtar Diop, Managing Director of IFC, emphasised the global significance of the partnership. “What India is pioneering today can inspire cities everywhere to build cleaner, more resilient, and future-ready urban spaces,” he said.
He added that the financing will help protect the city’s coastline, create jobs, and set a new benchmark for sustainable urban growth.
The financing structure, featuring 15-year tenure with a floating interest rate of 8.15 percent, holds GVMC solely responsible for repayment, showcasing a new model of municipal creditworthiness. This historic agreement positions Visakhapatnam as a leader in leveraging international capital to drive urban transformation and sustainability.
