BHUBANESWAR: Odisha government has signed an MoU with Housing and Urban Development Corporation Ltd (HUDCO) for term loans up to Rs 1 lakh crore over the next five years to finance housing and urban infrastructure projects across the state.
The agreement will provide long-term funding for projects under the Urban Challenge Fund (UCF), the Bhubaneswar-Cuttack-Puri-Paradip Economic Region (BCPPER) and the Mukhyamantri Sahari Vikas Yojana (MSVY), besides supporting land acquisition for urban housing and infrastructure initiatives.
Beyond lending, HUDCO will extend comprehensive project development support under its UiWIN (Urban invest Window) initiative. The assistance will include preparation of detailed project reports (DPRs), pre-feasibility studies, project structuring, financial modelling, creation of asset registers and capacity building for urban local bodies.
The corporation will also provide consultancy services, and training and support for securing viability gap funding (VGF) to improve the bankability of projects.
As per the agreement, the loans will be released in phases on flexible terms, including a moratorium period and repayment schedules extending up to 25 years, allowing the state to align debt servicing with long-term fiscal planning.
The MoU also provides a structured repayment mechanism. Loan repayments will primarily be routed through escrow accounts funded by revenues generated from the respective projects. Where required, repayments may also be secured by ring-fencing other revenue streams, including identified receivables or allocations from the state budget, to ensure financial discipline and reduce credit risk.
Separate loan agreements will be executed for individual projects based on mutually agreed terms and conditions. While the financing arrangement spans five years, the MoU will remain valid for three years, subject to annual performance reviews.
Officials said the partnership assumes significance following the launch of the Union government’s Urban Challenge Fund (UCF) on April 15 this year. Under the scheme, the Centre will provide grants of up to 25 per cent of approved project costs, while at least 50 per cent of project funding must be mobilised through institutional loans, municipal bonds or public-private partnerships.
The HUDCO partnership will strengthen the state’s ability to leverage the UCF framework and expedite financing and preparation of large-scale urban infrastructure projects, they added.
