Viability of these projects is dependent to a large extent on reform-linked measures. Lending agencies like Hudco are assured of repayment only if project executors follow measures like imposition of user fee. We are giving loans and not grants. So we link it with reform agenda for recovery of costs, said Hudcos senior executive director PS Rana.
Hudco finances water supply, sewerage and drainage, solid waste management, transport, roads and bridges, airports and railway projects. It also finances information technology parks and commercial infrastructure but this sector comprises only about 5 per cent of Hudcos infrastructure lending.
Road and bridge projects comprise about 36 per cent of Hudcos infrastructure lending portfolio. Sanctions to this sector are to the tune of Rs 3,605.71 crore. The total lending for the transport sector, comprising roads, transport terminals, railways, airports and ports has been to the tune of Rs 4,000 crore.
Loans amounting to Rs 2,579.71 crore have been sanctioned by Hudco for 30 water supply schemes. Together with sewerage, the sector comprises about 27 per cent of Hudcos lending to infrastructure projects.
On being asked which of these sectors are safe investment for a financial institution, Dr Rana said, Some projects in one sector may be more viable than others in the same sector.
Hudco lends to state level financing institutions, development authorities, regional planning boards, joint sector companies, non-government agencies and private agencies. Its interest rate for private companies is about 1 per cent higher than that for other borrowers.
Hudco at present is lending at 10-10.75 per cent to government and semi government agencies.