IFC commits ₹498 crore to GVMC for Madhurawada Sewerage System project

The International Finance Corporation (IFC), a member of the World Bank Group, has announced a commitment of up to $60 million (₹498 crore) in Rupee-denominated Non-Convertible Debentures (NCDs) to the Greater Visakhapatnam Municipal Corporation (GVMC). A formal agreement was signed between the IFC and the GVMC at the AP Secretariat in Amaravati on Monday.

This is the first-ever direct municipal financing by IFC in India, and also the first instance of a development finance institution extending investment to an Indian city without a sovereign guarantee.

The investment will be spent for the Madhurawada Sewerage System Project, which aims to revolutionise sanitation infrastructure in one of Visakhapatnam’s fastest growing urban regions.

S. Suresh Kumar, Principal Secretary to the Government, Municipal Administration & Urban Development Department, said: “The collaboration with IFC is a transformative step not just for Visakhapatnam but for urban India as a whole. It signals to the world that Indian cities, when financially disciplined and administratively progressive, can attract global investments without sovereign guarantees.”

Makhtar Diop, managing director of IFC said: “When cities have the vision to lead, innovative financing can be a catalyst for massive urban transformation. Our partnership with Visakhapatnam shows how municipalities can mobilise private capital to deliver essential services affordably and sustainably without sovereign guarantees. This first-of-its-kind municipal financing will help protect the city’s coastline, create jobs, and set a new benchmark for resilient and low-carbon growth.”

GVMC Commissioner Ketan Garg said: “This is a defining moment for Visakhapatnam. By partnering with IFC, we are addressing one of the most critical challenges of urbanisation, i.e., sanitation, in a way that is financially sustainable and environmentally responsible. Visakhapatnam is proud to be the first city in India to access global development finance directly, proving that municipal bodies can be trusted creditworthy partners in shaping the future of urban India.”

Visakhapatnam, Andhra Pradesh’s largest city and a rapidly growing economic hub, is experiencing unprecedented urban expansion. The Madhurawada Zone, situated in the city’s northern corridor, is witnessing large-scale vertical residential development, the growth of IT and digital economy clusters and establishment of premier educational and healthcare institutions.

With nearly 2.5 lakh people already residing in this zone, the absence of a comprehensive underground sewerage system posed severe challenges, including: discharge of untreated wastewater into natural streams and water bodies, increasing public health risks, including waterborne diseases, environmental degradation, particularly contamination of groundwater and coastal ecosystems, and urban flooding risks due to unregulated sewage flows during monsoons.

P. Sampath Kumar, Commissioner and Director of Municipal Administration, Victora Delmon, Manager, Infrastructure, IFC (Asia Pacific), Neeraj Gupta, Principal Investment Officer and Cities Lead, IFC India, Abhishek Gupta, Associate Investment Officer and GVMC Loan Project Leader, Sameer Trikha, Catalyst Trusteeship, and Jeetu Tolani, Cyril Amarchand Mangaldas, were also present at the signing ceremony.