Last-mile funding: Govt gives Rs 10,284 crore for completion of 101 stalled housing projects

According to an industry estimate late last year, as many as 4.58 lakh housing units were facing delayed delivery across 1,509 stalled projects. (Representative image)

An alternate investment fund (AIF), set up to extend last-mile funding to complete stuck housing projects, has sanctioned as much as Rs 10,284 crore for 101 projects, the finance ministry said on Friday. This will enable the completion of 71,559 houses across the country.

As of August 20, the fund, set up under the Special Window for Affordable and Mid Income Housing (SWAMIH), gave final approval to investments of Rs 3,472 crore in 22 projects, while preliminary nod was granted to 79 projects involving investments of Rs 6,812 crore.

Finance minister Nirmala Sitharaman reviewed the performance of the SWAMIH fund last month with top officials of her ministry and the senior management team of the State Bank of India, SBI Capital Markets and SBICAPS Ventures (SVL). SBICAP Ventures, an arm of SBI Capital Markets, is entrusted by the government to manage this AIF.

Sitharaman had asked officials concerned to further speed up the process. Offtake under the scheme was hit by the outbreak of the Covid pandemic though authorities had moved quickly to set up the fund.

The projects are spread across a broad mix of markets, including metros and also Tier- 2 locations like Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag and Chandigarh.

After the meeting last month, the ministry had said the Fund was also actively evaluating options to provide relief to more than 15,000 homebuyers in certain long- stalled projects which were pending before the Supreme Court for resolution.

The fund was announced on November 6, 2019 and raised Rs 10,530 crore from 14 investors, including LIC, HDFC and SBI, when it declared its first close in December. The plan was to have a Rs 25,000 crore fund, with contribution of both the government and other investors.

The government had pledged a total of Rs 10,000 crore for this purpose, as it wanted to kick-start the investment cycle in residential projects and deliver houses to people who have been humbled by the double whammy of undelivered homes and regular repayment of home loans. It was also supposed to boost private consumption once houses are delivered.

According to an industry estimate late last year, as many as 4.58 lakh housing units were facing delayed delivery across 1,509 stalled projects.

Announcing its support to stuck housing projects in September last year, the finance ministry had said the new fund would have an NIIF-like structure where the government would contribute half of the corpus and other investors, including foreign ones and domestic financial institutions, will do the rest. It will be run by professionals, who will offer funds to the stuck projects that have not been declared non-performing assets or dragged to the NCLT. It will help complete only affordable and middle-income housing projects.

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