Vijayawada: The municipal administration and urban development department has aims to accelerate urban infrastructure growth across the state through the Public–Private Partnership (PPP) mode.
This aligns with the Chief Minister N. Chandrababu Naidu’s Swarna Andhra 2047” vision and result in a Rs 2.8 lakh crore rise in the gross state domestic product (GSDP).
According to official estimates, urban areas would require an investment of Rs 66,523 crore by 2029, across 12 sectors including smart water systems, modern transport networks and sustainable housing—excluding the capital city of Amaravati.
To support the initiative, the state government has allocated Rs 2,000 crore as viability gap funding (VGF) in the current budget, so as to catalyse private participation and project implementation.
The PPP-based infrastructure drive is expected to generate around 2.3 lakh direct and indirect jobs across the construction, technology, and urban service sectors, with targeted inclusion of 45 per cent skilled youth and 35 per cent women in the new employment avenues.
Principal secretary to the MA&UD department, Suresh Kumar, said the state is setting new benchmarks for future-ready urban infrastructure that meets global standards. “These projects will create unprecedented economic momentum and position Andhra Pradesh as one of India’s fastest-growing urban hubs with sustainable funding models,” he said.
As part of the new urban strategy, AP would develop five smart cities with integrated IoT systems, upgrade 2,500km of road networks, and introduce 15 new urban transit systems. New projects would also adopt green building standards to ensure 40 per cent higher energy efficiency in future developments.
The state also aims to attract Rs 35,000 crore in Foreign Direct Investment (FDI) across eight upcoming economic zones. A dedicated PPP unit has been formed to implement a comprehensive policy framework, along with risk mitigation and performance-monitoring mechanisms. Financial incentives, including access to international finance, municipal and green bonds, and credit enhancement tools, would support these projects.
The MA&UD department is advancing 33 PPP projects across sectors such as waste-to-energy, urban mobility, housing, tourism and renewable energy. Progress has been reported in the Rs 1,254 crore waste-to-energy clusters covering Nellore, Rajahmundry–Kakinada, Kurnool, Kadapa, Vijayawada and Tirupati.
Other major initiatives—such as MIG housing, Rushikonda land monetisation, and the Iconic Tower—have entered the bidding stage, while road, solar and commercial PPPs are nearing tender or feasibility stages.
Through strategic alignment with national schemes like the urban challenge fund (Rs 10,000 crore) and the credit enhancement initiative (Rs 400 crore), the state plans to maximise central support. Nearly Rs 2,000 crore in incentives under the SSASCI 2025–26 programme and a Rs 50 crore grant for setting up municipal shared service centres have been finalised to strengthen professionalised, technology-based governance across urban local bodies.
Suresh Kumar said a key component of the strategy is a state-wide land monetisation programme, under which 1,300 acres across 73 parcels in 18 urban development authorities have been identified for PPP-led commercial development. Expressions of Interest have already been floated in four UDAs, with more to follow.