Telangana seeks World Bank assistance for urban mission programme in PURE and RARE regions

Telangana government is said to be seeking the World Bank’s assistance for the Telangana Urban Transformation and Jobs Program

The Telangana Government is actively working on securing loans from multilateral agencies for financing its urban development programmes.

The government is said to be seeking the World Bank’s assistance for the Telangana Urban Transformation and Jobs Program, part of the India Municipal Finance Multi-Phase Programmatic Approach (MPA), aimed at improving municipal finance systems, strengthen governance capacity and enhance access to commercial finance. The project envisages strengthening of the institutional and financial capacity of urban local bodies including access to market finance and improving climate resilient urban infrastructure in selected cities in the State.

The project, involving an estimated US $430 million (approximately ₹4,000 crore), will havethe International Bank for Reconstruction and Development extending US $300 million Programme for Results loan and US $130 million to be funded by the State Government. It will support the State Government’s urban mission programme in selected cities in the Peri-Urban Regional Economy (PURE) and Rural Agricultural Regional Economy (RARE) as part of the Telangana Rising 2047 vision. The project is likely to be approved next year.

According to information, the project will help local bodies finance and manage with their own resources and access market finance by strengthening of the Telangana Urban Finance and Infrastructure Development Corporation (TUFIDC) as financial intermediary, rewarding improvements in urban local bodies’ finances and supporting municipal bonds. It will also finance climate-resilient water supply, sanitation, drainage and public spaces, and regeneration of municipal assets including areas around heritage sites for productive economic use.

The project envisages development of an ecosystem for institutional strengthening and municipal finance aimed at ensuring that the institutions and systems allow ULBs to finance and manage urban services with their own resources. The approach would be strengthening the TUFIDC at the State level. At the ULB level, it will reward better finances, support municipal bonds and build municipal finance skills.

The project is conceived in view of the rapid growth witnessed in the secondary and peri-urban cities necessitating investment in infrastructure and services at a scale that State grants and municipal revenues alone cannot finance. Urban Local Bodies (ULBs) depend largely on State and central transfers with low own source revenues and uneven financial reporting as a result of which only few ULBs are creditworthy.