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TAMIL NADU URBAN DEVELOPMENT FUND

Tamil Nadu Urban Development Fund (TNUDF) was established by Government of Tamil Nadu on November 29, 1996, as a Trust under The Indian Trust Act 1882., to finance the implementation of urban infrastructure projects in the State of Tamil Nadu. TNUDF was formed by conversion of Municipal Urban Development Fund (MUDF), with contribution from Government of Tamil Nadu along with all India financial institutions viz., ICICI Bank Limited (formerly ICICI Ltd), Housing Development Finance Corporation Limited and Infrastructure Leasing and Financial Services Limited. TNUDF is the first public-private partnership providing long term debt for civic infrastructure on a non-guarantee mode. TNUDF is managed by a Corporate Trustee viz., Tamil Nadu Urban Infrastructure Trustee Company Limited (TNUITCL). The Board of Trustees periodically review the lending policies and procedures. TNUDF is financing urban infrastructure projects in the State of Tamil Nadu by availing funds from external agencies viz., World Bank, KfW (German Funding Agency), Japan International Cooperation Agency and Asian Development Bank.

Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) is the Fund Manager of TNUDF.

FUND OBJECTIVES

  • Fund Urban Infrastructure projects, which improve the living standards of the urban population
  • Facilitate private sector participation in infrastructure through joint venture and public-private partnership
  • Operate a complementary window, the Grant Fund, to assist in addressing the problems of the urban poor
  • Improve the financial management of urban local bodies enabling them to access debt finance from markets

ELIGIBLE BORROWERS

All categories (Corporations, Municipalities and Town Panchayats) of Urban Local Bodies (ULBs) in the State of Tamil Nadu and Chennai Metropolitan Water Supply & Sewerage Board (CMWSSB) are eligible to avail financial assistance in the form of loan for implementation of urban infrastructure projects.

RESOURCES

The resources for TNUDF are the receipts from Government and other contributors towards Units and loans availed from external funding agencies. The details of the externally aided projects are furnished below:

Tamil Nadu Sustainable Development Project (TNSUDP) assisted by World Bank

The TNSUDP with the assistance of World Bank was launched on 03.06.2015. The objective of the project is to improve urban services in participating ULBs in financially sustainable manner and to pilot improved urban management practices in selected cities.

A sum of Rs.930.57 crores has been disbursed as term loan to the ULBs based on the progress of the projects under TNSUDP as on 31.03.2019.

Sustainable Municipal Infrastructure Financing – Tamil Nadu (SMIF-TN) assisted by KfW

The SMIF TN Program with the assistance of KfW(German funding agency) was launched in 2008. The objective is to improve the living conditions of residents in urban areas by constructing and improving water supply, sewerage and other urban facilities. The Program has two Phases and the Phase II has two parts. The Phase -I of the program has been completed and the Phase-II is under implementation.

A sum of Rs.865.03 crores (Rs.371.52 crores under SMIF TN Program, Rs.267.96 crores under SMIF TN-II-Part-1 Program and Rs.225.55 crores under SMIF TN-II-Part-2 Program) has been disbursed as term loan to the ULBs based on the progress of the projects up to 31.03.2019.

Tamil Nadu Urban Flagship Investment Program (TNUFIP) -Tranche-1 assisted by Asian Development Bank (ADB)

The TNUFIP has three phases (Phase-I, Phase-II and Phase-III). The objective of the Program is to develop priority water supply, sewerage and drainage infrastructure located within strategic industrial corridors of Tamil Nadu, support innovative pilots, improve urban governance and strengthen the capacity of State and local institutions to enhance environmental sustainability, climate resilience and urban livability. The TNUFIP Tranche-1 was launched on 16.11.2018. The loan for the project will be disbursed from the financial year 2019-20.

MONITORING & RECOVERY

As for monitoring and recovery, efforts are made to assess the credit risk and concentration of credit. Wherever undue delay is noticed in repayment of dues, close follow-up action is being pursued. Necessary provision has been included in the loan agreement to escrow the collections of ULBs and / or to maintain a Debt Service Reserve Fund as the case may be. TNUDF has achieved record 100% collection efficiency continuously for the past fifteen financial years.