Odisha secures ₹1 trillion Hudco term loans for urban transformation

Hudco will extend term loans of up to Rs 1 trillion over five years to support housing, urban infrastructure and sustainable development projects across Odisha

In one of the biggest financial partnerships for urban infrastructure in the eastern region, the Housing and Urban Development Corporation Limited (Hudco) has signed a deal with the Odisha government to extend term loans of up to Rs 1 trillion over the next five years for housing and urban infrastructure projects across the state.

 

According to the agreement, Hudco will facilitate the planning, development and financing of projects under the Urban Challenge Fund (UCF), the Bhubaneswar-Cuttack-Puri-Paradeep Economic Region (BCPPER) and the Mukhyamantri Sahari Vikas Yojana (MSVY). Besides financing physical infrastructure, the funding will also be utilised for land acquisition, an area that often delays the implementation of major urban projects in the state.

   

Krushna Chandra Mahapatra, minister for Housing and Urban Development (H&UD) and Public Enterprises, said Odisha is steadily progressing towards the goal of becoming a Viksit Odisha by 2036, contributing meaningfully to the national vision of Viksit Bharat 2047, and the development of cities and urban areas is an essential part of this ambitious goal.

 

"The Union government has constituted the Urban Challenge Fund for accelerating the development of sustainable urban infrastructure over five years. According to the funding pattern, both the Centre and the state will cover up to 25 per cent each of the project cost, while the remaining 50 per cent will be sourced from the market (through municipal bonds or loans). Hudco has partnered with the Government of Odisha for a Rs 1 trillion infusion for urban transformation and housing," he said.

 

The agreement, Mahapatra said, is expected to provide a major financial backbone for the government's ambitious plans to modernise cities, develop new urban growth centres and strengthen civic infrastructure under multiple flagship programmes.

 

The financial assistance will be released in phases based on project requirements. The loans will come with flexible terms, including a moratorium period and a repayment tenure of up to 25 years, allowing the state to execute long-gestation infrastructure projects without immediate fiscal pressure. The agreement also permits prepayment by any statutory authority designated by the Odisha government.

 

"The repayment mechanism has been designed to reduce financial risk for both parties. The loan will be serviced through escrow of revenues generated from the projects or by ring-fencing other identified revenue sources and state budgetary support, ensuring timely repayment to Hudco," an official of the Navratna central public sector enterprise said.

 

Beyond financing, Hudco will also provide extensive technical and institutional support through its UiWIN initiative. The corporation will assist the state and urban local bodies in project preparation, technical structuring, preparation of detailed project reports (DPRs), pre-feasibility studies, financial modelling, creation of asset registers and viability gap funding support for bankable infrastructure projects.

 

Apart from this, capacity-building programmes, consultancy services and knowledge-sharing initiatives will also be undertaken to strengthen urban governance and improve the project execution capabilities of urban local bodies (ULBs).

 

Usha Padhee, additional chief secretary of the H&UD Department, and Sanjay Kulshrestha, chairman and managing director of Hudco, signed the deal. Hudco has maintained a longstanding association with Odisha's urban development sector. Over the years, the corporation has financed and supported several housing, water supply, sewerage and civic infrastructure projects in the state through loans.

 

The H&UD Department has also signed a tripartite agreement with IIT Bhubaneswar and Development Alternatives to establish the Centre of Excellence (CoE) on low-carbon construction materials and sustainable development. The initiative will promote research, innovation, capacity building and the adoption of sustainable construction practices to support Odisha's vision of building cleaner, greener and future-ready cities.

 

As part of the initiative, the CoE will prepare a comprehensive roadmap for construction and demolition (C&D) waste management for the rapidly urbanising clusters. The project includes a scientific assessment of construction and demolition waste generation, preparation of an integrated waste management strategy and promotion of innovative technologies. The framework developed under this initiative is expected to serve as a scalable model for implementation across other urban centres in Odisha.

 

"Integrating sustainable construction practices, scientific waste management and evidence-based planning into the urban development framework will be critical to building resilient, resource-efficient and environmentally sustainable cities in Odisha," Padhee said.