The Ministry of Housing and Urban Affairs’ (MoHUA) first National Apex Committee (NAC) for the Urban Challenge Fund (UCF) has, in principle, approved three projects across 26 urban local bodies in Telangana with a total outlay of ₹5,681.04 crore and Central allocation of ₹1,420.26 crore.

According to an official communication received by the Municipal Administration and Urban Development (MA&UD) department on Wednesday, the ₹4,674.6 crore underground sewerage network project in Warangal has been cleared including Central assistance of ₹1,168.65 crore and a loan of ₹2,337.30 crore from German development bank KfW.

The second major project, with a total outlay of ₹840 crore, will be implemented in Karimnagar. It covers solid waste management, riverfront development, stormwater drains, roads and junction improvements, footpaths, and a skywalk with the Centre’s contribution being ₹210 crore and 50% HUDCO loan. The third project involves the establishment of an AI-based Integrated Command and Control Centre (ICCC) in Khammam at a cost of ₹166.44 crore. The centre will provide digital governance support to municipal bodies in the Khammam–Warangal–Karimnagar cluster with financial grant of ₹41.61 crore and a ₹83.22 crore loan from HUDCO.

Under MoHUA’s UCF provisions, cities are encouraged to access market-linked financing for projects with demonstrable economic impact, scalability, sustainability, and strong reform linkages. The Centre will release 25% of the grant once the States secure 50% of the required bank tie-up, while the remaining share will be contributed by States or urban local bodies.

MA&UD Secretary T.K. Sreedevi, also the Commissioner & Director of Municipal Administration, said that Chief Minister A. Revanth Reddy is keen on developing the Warangal corridor. Apart from the sewerage network in Warangal, 60 km of model roads will be developed in Karimnagar alongside integrated waste management systems to prevent leachate leakage into the Manair river.

Mr. Reddy had also cleared 23 other municipal projects worth ₹14,000 crore, covering drinking water supply, waste-to-energy and other sectors, under UCF and these are currently under appraisal, she added. Overall, the NAC meeting held earlier this month has approved 17 projects across the country worth ₹14,867.88 crore, including Central assistance of ₹3,717.48 crore. These span cities such as Nashik and Pune in Maharashtra, Visakhapatnam and Mangalagiri in Andhra Pradesh, Sambalpur, Berhampur and Rourkela in Odisha, New Shillong Township in Meghalaya, and Bengaluru in Karnataka.