Hudco to provide up to ₹1 trillion loan for Bihar infrastructure projects

State-owned Housing and Urban Development Corporation (Hudco) on Friday signed a memorandum of understanding (MoU) with the Bihar government to provide term loans of up to ₹1 trillion over the next five years for urban infrastructure projects in the state.

 

The proposed financing is equivalent to about $10.5 billion at current exchange rates, the company said in its regulatory filing.

 

Under the arrangement, Hudco intends to extend funding for a range of urban infrastructure projects, including land acquisition.

 

The MoU states that the funding framework has been created to facilitate the planning, development and financing of proposed greenfield satellite cities in Bihar in a time-bound manner, in accordance with the state government's rules and regulations.

   

The loans will be drawn by statutory authorities designated by the Bihar government for specific projects, the company said.

 

The financing package includes flexible terms and conditions, including a moratorium period and a repayment tenure of up to 25 years. The agreement also provides borrowers with the option of prepayment.

 

According to the MoU, repayment obligations will be met through revenue generated from the projects. The agreement also allows repayments to be secured through ring-fenced revenue streams from identified receivables or allocations from the state budget.

 

The document further states that separate operational agreements detailing the scope of work, project-specific requirements and commercial terms will be executed between the parties based on mutually agreed conditions.

 

The agreement will remain valid for three years from the date of execution and will be subject to an annual review, Hudco said.