HUDCO-backed funding to increase regional air connectivity in four districts under Phase-1

What happens when small towns are ready for takeoff but need help getting off the ground? That’s what Andhra Pradesh’s latest move is trying to address.

The state government has decided to guarantee a ₹1,000-crore loan from the Housing and Urban Development Corporation (HUDCO) for the Andhra Pradesh Airports Development Corporation Limited (APADCL).

This decision, outlined in a cabinet resolution passed in July 2025, aims to kickstart airport infrastructure in less-served regions through land acquisition, external road works, and debt clearance.

Four Towns, One Loan, Big Push for Air Access

Kuppam, Dagadarthi, Srikakulam, and Amaravati are the towns covered in the first phase of the project. These locations have been selected based on technical feasibility and their potential to support tier-2 and tier-3 air travel needs.

The loan is structured as a shortfall guarantee by the government, meaning that the state will cover any repayment gaps. According to a detailed financial outline released on July 10, 2025, the ₹1,000 crore is part of a larger ₹1,074.91 crore proposal already prepared by APADCL. The sanctioned funds will also help settle pending liabilities and build trunk infrastructure to support airport services.

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What's in the Budget?

A breakdown shared on a LinkedIn post by a state planning official reveals a detailed use of the funds. The official post, dated July 11, 2025, stated:

Component	Estimated Cost (₹ Crore)
Land Acquisition	597.51
Trunk Infrastructure	202
Liability Clearance	175
Contingency Fund	100

These numbers form part of the Phase-1 package and were confirmed by state sources familiar with the cabinet proceedings.

Now moving beyond the budget, a look at the development stage of each location shows which airport could see construction activity begin sooner.

Development Progress at Each Site

Airport Site	TeFR (Techno-Economic Feasibility Report)	Land Status
Kuppam	Completed	Identified and Notified
Dagadarthi	Completed	In Acquisition Phase
Srikakulam	Ongoing	Under Evaluation
Amaravati	Ongoing (only for external infrastructure)	External infra in planning

The APADCL has been tasked with preparing the groundwork including the Detailed Project Reports (DPRs), obtaining regulatory clearances, and floating tenders.

The Wider Plan: Eight Airports and Regional Vision

The guaranteed loan is part of a wider plan to build eight greenfield airports in Andhra Pradesh. These include airports in Bhogapuram, Tuni-Annavaram, Tadepalligudem, Ongole, Nagarjuna Sagar, and the Amaravati Greenfield International Airport, in addition to the four selected in the first phase.

According to a July 2025 report published by Projects Today, ₹1,570.64 crore was separately sanctioned earlier this year for land acquisition across the eight planned airports. This shows the state's intent to scale air infrastructure as a way to bridge mobility and trade gaps between smaller towns and economic corridors.

Here’s a look at the broader list:

Proposed Airports	Category	Planning Stage
Kuppam	Tier-3 Passenger	Phase-1
Dagadarthi	Regional Utility	Phase-1
Srikakulam	Tier-3 Commercial	Phase-1
Amaravati (External Infra)	Greenfield	Phase-1 (infra only)
Tuni-Annavaram	Feasibility	Pre-TeFR
Ongole	Utility + Cargo	Cabinet Cleared (July)
Nagarjuna Sagar	Regional Tourism	Feasibility Cleared
Bhogapuram	Flagship Greenfield	Nearing Completion

This table points to the geographical spread and strategic categorisation of each project.

Another key aspect is that this loan isn’t only for greenfield works. It includes funds to meet APADCL’s past liabilities, showing the state’s attempt to streamline its aviation finances before attracting private partnerships.

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Planning Authority and Execution Role

APADCL, the nodal agency under the Andhra Pradesh Infrastructure and Investment Department, will act as the executing body. It is already handling the Bhogapuram airport, and now has been given authority to initiate and supervise developments at these new locations as well. The official APADCL portal lists these locations as part of its medium-term infrastructure rollout.

According to a July 14, 2025, cabinet brief from the Government of Andhra Pradesh, the Infrastructure Secretary has been asked to hold meetings with financial institutions to finalise the credit line from HUDCO and define a repayment framework. A second report is expected before the end of this financial quarter.

Conclusion

By September 2025, the Andhra Pradesh Airports Development Corporation Limited (APADCL) is likely to submit final reports for at least two airports included in the first phase. These reports will outline the full plan for construction and help the government move to the next steps. This includes signing contracts for engineering and building work, arranging the purchase of materials, and getting all the necessary environmental clearances.

If the required funds are released on time and the land paperwork is completed, early construction work at the Kuppam airport site could begin in the first few months of 2026.

At present, most travel between districts in Andhra Pradesh happens by road or rail. Air travel is limited in many smaller towns. The new airports are expected to improve regional travel and make it easier to connect smaller towns to larger cities. W

ith the ₹1,000-crore loan guarantee in place and phase one already moving forward, the state is making a clear push to strengthen air travel as part of its growth plan.

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