Odisha Secures Rs 1 Lakh Crore HUDCO Funding to Accelerate Urban Infrastructure Projects

Odisha has lined up a major financing partnership to accelerate its urban transformation, with the state government entering into an agreement with Housing and Urban Development Corporation Ltd (HUDCO) that could unlock term loans of up to Rs 1 lakh crore over the next five years for housing and infrastructure projects across the state. The funding is expected to support a broad range of urban initiatives, from land acquisition to city infrastructure development, as Odisha pushes ahead with its long-term urban growth agenda. 

The memorandum of understanding (MoU) outlines HUDCO’s intent to extend financial assistance for projects linked to the Urban Challenge Fund (UCF), the Bhubaneswar-Cuttack-Puri-Paradeep Economic Region (BCPPER) and the Mukhyamantri Sahari Vikas Yojana (MSVY). Besides physical infrastructure, the proposed financing also covers land acquisition for housing and urban development projects under these programmes. 

The agreement goes beyond lending. HUDCO will provide technical assistance through its UiWIN initiative, helping the state prepare and execute projects by supporting detailed project reports (DPRs), pre-feasibility studies, financial modelling, viability gap funding (VGF) assessments for bankable projects, consultancy services and capacity-building programmes for urban local bodies. 

According to the terms of the MoU, the loans will be released in phases on flexible conditions, including a moratorium period and repayment schedules extending up to 25 years. Repayment will be backed by revenues generated from the projects or other identified revenue streams of the Odisha government and its agencies. While the financing arrangement spans five years, the MoU itself will remain valid for three years, during which individual projects will be taken up through separate operational agreements based on mutually agreed conditions and project requirements. 

The financing arrangement is expected to strengthen Odisha’s efforts to modernise urban infrastructure at a time when the state is pursuing ambitious city development plans. Among the flagship initiatives is the Bhubaneswar-Cuttack-Puri-Paradeep Economic Region, envisioned as a major economic growth corridor, alongside urban projects proposed under the Centre’s Urban Challenge Fund and the state’s own Mukhyamantri Sahari Vikas Yojana. 

The Urban Challenge Fund, approved by the Union Cabinet earlier this year, is designed to promote market-driven urban development by providing Rs 1 lakh crore in Central assistance over five years. The programme supports projects under themes such as Cities as Growth Hubs, Creative Redevelopment of Cities, and Water and Sanitation, while encouraging cities to mobilise additional financing through municipal bonds, bank loans and public-private partnerships. 

Odisha has already positioned several major urban proposals under this framework. The state has been advancing plans for the Bhubaneswar-Cuttack-Puri-Paradeep Economic Region and other large-scale urban development projects as part of its broader vision to build climate-resilient, technology-enabled and economically competitive cities.