Our Role

HUDCO started a window for financing the development of urban infrastructure called 'Urban Infrastructure Finance Wing' in the FY 1989-90 for. The core or priority sector infrastructure facilities include projects in the sectors of water supply, sewerage, drainage, solid waste management, roads, electricity, smart cities, industrial infrastructure, etc in the urban areas. Later on, development of social infrastructure facilities required in the neighbourhood areas, but not essentially viable on standalone basis, undertaken by the government agencies were also included. The social infrastructure component like play/primary schools, working women hostels, health centre, play grounds, police stations, courts, jails, crematorium etc. which are not financially viable received benefit of funding at lower rate of interest.

The funding of infrastructure projects in the year 1990 was relatively new concept as these projects required high capex and had long gestation period while return was not-guaranteed as the political will to charge basic services was not there. HUDCO entered in the area and provided long term loans (upto 20 years) to the ULBs for meeting the capital requirement and moratorium during the construction period on cash flow basis. HUDCO’s intervention created awareness to charge for the improved services so that enough return on the investment is available to service the loan and maintain the services.