The proposed financing will be spread over five years and will primarily support the development of industrial parks across Bihar, including the acquisition of land and construction of infrastructure needed to make the sites ready for industrial use.
Under the agreement, HUDCO will provide term loans of up to ₹25,000 crore in tranches to a statutory authority designated by the state government.
Loans can run for up to 25 years
The financing will come with flexible terms, including a moratorium and repayment schedules of up to 25 years. Borrowers will also have the option to repay the loans early.
The Bihar government has entrusted the state’s Infrastructure Development Authority with facilitating or implementing the identified projects.
The authority can acquire, purchase, consolidate and develop land for industrial parks, as well as build the supporting infrastructure required for the projects.
Loan repayments could come from revenue generated by the projects themselves or from other identified government receivables or the state budget, according to HUDCO’s exchange filing.
Individual projects will be governed by separate agreements spelling out their scope and financing terms.₹25,000 crore is a financing commitment, not immediate spending
The MoU sets out the two sides’ intention to work together and doesn’t mean ₹25,000 crore will be disbursed immediately.
Funding will be drawn in tranches over five years, with separate agreements to be signed for individual projects on mutually agreed terms.
The MoU itself will remain valid for three years and will be reviewed annually.
HUDCO shares closed 0.11% lower at ₹178.38 on Wednesday.
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