Centre, Tamil Nadu govt and World Bank ink pact for affordable housing

It will also aim to unlock regulatory barriers

Government of India, State government of Tamil Nadu, World Bank, Low-income groups, Access to affordable housing, First Tamil Nadu Housing Sector Strengthening Programme, Tamil Nadu Housing and Habitat Development Project, Unlock regulatory barriers, Incentivise private sector participation, Pradhan Mantri Awas Yojana, Tamil Nadu Shelter Fund, Housing finance, Tamil Nadu Slum Clearance Board, Chennai Metropolitan Development Authority, Tamil Nadu Infrastructure Fund Management Corporation, International Bank for Reconstruction and Development

The government of India, the state government of Tamil Nadu and the World Bank have entered legal agreements to help low-income groups in the state to get access to affordable housing.

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 housing sector policies, institutions and regulations in the state.

The First Tamil Nadu Housing Sector Strengthening Programme supports the government’s ongoing efforts to increase availability of affordable housing by gradually shifting the role of the state from being the main provider to an enable.

It will also aim to unlock regulatory barriers and incentivise private sector participation in affordable housing for low-income families.

With the allocation provided under the Pradhan Mantri Awas Yojana (Urban) and the two projects from the World Bank, a large number of the urban poor in the state are expected to get access to better housing and, in the process, improve their living conditions.

Nearly half of the state’s population is urban, and this is expected to increase to 63% by 2030. An estimated six million people are currently living in slums, representing 16.6% of the state’s urban population.

Concurrently, the Board has also approved $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; the Chennai Metropolitan Development Authority, the land use planning authority for the Chennai Metropolitan Area; and the Tamil Nadu Infrastructure Fund Management Corporation, 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.

Most Popular

Awards

Olympia Group announces to build up 1.1mn sq-ft greenfield it park in Guindy
The project will have a total investment of about Rs 750 crore

Conferences

Vital pre-monsoon building works resume in Maharashtra
The state government has permitted pre-monsoon work by BMC and other agencies

Latest Issue

June 2020
10 Jun 2020