Andhra Pradesh clears over 800 acres for Reliance’s ₹1 lakh-cr AI data centre in Vizianagaram

The Andhra Pradesh government on Wednesday approved the allotment of over 800 acres of land in Vizianagaram district to Reliance Industries Ltd at a discounted rate of 25% for the establishment of a Giga Scale AI Data Centre (AIDC) with Cable Landing Station at an investment of over ₹1 lakh crore.

IT Secretary Bhaskar Katamneni directed Andhra Pradesh Industrial and Infrastructure Corporation (APIIC) and Vizianagaram district administration to identify an additional acre of land suitable for the Cable Landing Station (CLS).

“The government accords approval for allotment of 854.97 acres of land in Vizianagaram district to Reliance Industries Limited, at a 25% discounted rate…The land allotment is intended for establishment of a Giga-Scale AIDC with CLS, with proposed cumulative investment of ₹1.08 lakh crore,” said Katamneni in a Government Order (GO).

APIIC identified land for the mega project in Polipalli, Bhogapuram West and Bhogapuram East villages in Vizianagaram district, the GO added.

Further, the government approved a host of tailor-made non-fiscal and fiscal incentives, exemptions, subsidies, reimbursements, discounts, waivers and other privileges for the ₹18.4-lakh crore conglomerate.

Under non-fiscal support, the state government shall facilitate guaranteed water provision for the project for a period of 20 years through the Water Resource Department, Municipal Administration and Urban Development Department and APIIC.

RIL will bear the cost for water provision while APIIC will also study a proposal on the development of a desalination plant under joint ownership between the company and the government.

Among fiscal incentives, the southern state approved the allotment of the 854 acres land for the data centre at a discount of 25%, requiring RIL to pay 75% land cost to APIIC as and when the land acquisition process is initiated.

Further, the TDP-led government sanctioned 100% exemption on stamp duty and registration charges along with a six% capital subsidy on investment in machinery and equipment, which will be disbursed over 10 equal installments with a cap of ₹4,500 crore, said the GO.

Besides, the state government offered 100% SGST reimbursement on construction and on leasing cost.

Under SGST reimbursement on construction, 100% reimbursement will be extended on the Net SGST accrued by the state and the total incentive component is limited to ₹2,527.3 crore, which will be available for 10 years or until the project reaches its maximum capacity.

The 100% SGST reimbursement on leasing cost for a period of 10 years will pertain to the net SGST accrued by the state and the total incentive component is limited to ₹1,800 crore, said the GO.

Further, the state government provided a 15% water tariff subsidy for the data centre project for a period of 10 years with the total incentive component capped at ₹552.4 crore.

Additional incentives include power tariff subsidy at a discount of ₹1 per unit for a period of 15 years but capped at ₹3,114 crore.

Further, the state offered cross-subsidy surcharge exemption for 20 years, which will ensure that cross-subsidy surcharge will not be levied for the captive solar park as per the provisions of the Energy Department, among other incentives.

According to the GO, RIL proposed the Giga-Scale AIDC with CLS project on March 31.