GoI and World Bank signed MoU to help low-income groups in Tamil Nadu

The Government of India, the Government of Tamil Nadu and the World Bank has signed a legal agreements to help low-income groups in the state of Tamil Nadu get access to affordable housing. The 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.

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Key-Points

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.

Nearly half of Tamil Nadu’s population is urban, and this is expected to increase to 63 percent by 2030.

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.