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| India, World Bank sign loan agreements for housing sector in Tamil Nadu: Point-to-Point Details |
India, World Bank sign loan agreements for housing sector in Tamil Nadu: Point-to-Point Details
The MoU Point-to-Point Details:
The legal agreements were signed for two projects – $200 million First Tamil Nadu Housing Sector Strengthening Programme and $50 million Tamil Nadu Housing and Habitat Development Project – to strengthen the state’s housing sector policies, institutions, and regulations.
The $200 million First Tamil Nadu Housing Sector Strengthening Programme supports the government’s ongoing efforts to increase the availability of affordable housing by gradually shifting the role of the state from being the main provider to an enabler. It will also aim to unlock regulatory barriers and incentivise private sector participation in affordable housing for low-income families.
The MoU Signed by:
The loan agreements were signed by Shri Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Mr Junaid Kamal Ahmad, Country Director (India) on behalf of the World Bank. Whereas, the project agreements were signed by Shri Hitesh Kumar S. Makwana, Principal Resident Commissioner, on behalf of the Government of Tamil Nadu and Shri Junaid Kamal Ahmad on behalf of the World Bank.
Benefits:
Concurrently, the Board also approved a $50 million Tamil Nadu Housing and Habitat Development Project to support innovations in housing finance and strengthen housing sector institutions in the state. It will finance the newly created Tamil Nadu Shelter Fund (TNSF) – an innovation in housing finance in India – by providing an equity contribution of $35 million.
This initial support to TNSF will enable cross-subsidisation opportunities where higher returns from commercial and high-income developments will compensate for lower returns from affordable housing. This will make affordable housing commercially viable for potential investors. The project will also strengthen the capacity of key housing institutions including the Tamil Nadu Slum Clearance Board, the state’s main provider of affordable housing; Chennai Metropolitan Development Authority, the land use planning authority for the Chennai Metropolitan Area; and Tamil Nadu Infrastructure Fund Management Corporation Limited, the asset management company of TNSF.
The loans of $200 million and $50 million from the International Bank for Reconstruction and Development (IBRD) have a maturity of 20 years including a grace period of 3.5 years.
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