Durgapur Affordable Housing

Improving access to quality, affordable housing for vulnerable populations in West Bengal

Context

India faces the challenge of mass migration from its rural to urban areas, as more people are being drawn towards opportunities for employment in its city centres. The development of urban housing infrastructure has not kept pace with the rise in housing demand from the burgeoning rural-urban migrant population. India is projected to face a total shortage of about 30 million urban housing units by 2022.

In order to address the issue of housing shortages, the Government of India has prioritised the development of the housing sector by establishing the Pradhan Mantri Awas Yojana (Urban) or PMAY (U) scheme in 2015. The PMAY (U) scheme aims to provide housing for all by the year 2022, through its investment in housing developments and the provision of subsidies on housing loans – for first-time house owners among women, and vulnerable populations (such as the elderly and wheelchair-bound), in particular.

Even with government support for growth in affordable housing options, the sector continues to face a lack of project development capacity and limited access to project financing. West Bengal, alone, is estimated to face a shortage of approximately 2.6 million housing units by 2030.

Through the Durgapur Affordable Housing project, InfraCo Asia aims to support the development of India’s affordable housing sector by providing the development expertise and early stage development equity needed to catalyse its growth. By developing the project in accordance with industry best practices and international standards for health and safety, InfraCo Asia expects to enhance the project’s bankability and credibility amongst lenders. Successful implementation of the project is also intended to create a demonstration effect for future private and public sector developers in the affordable housing space.

The Project

Once constructed, the Durgapur Affordable Housing project is expected to provide around 2,000 housing units within the aerotropolis ‘Sujalaam SkyCity’ in Durgapur, West Bengal. The project will create some of the first Grade-A quality residential units targeting first-time home owners in the Economically Weaker Section (EWS), Lower and Middle Income Groups (LIG & MIG) categories of households in society. The project also looks to reduce the costs of house ownership by tapping into the Credit Linked Subsidy Scheme (CLSS) and Affordable Housing in Partnership (AHP) policy which fall under the PMAY (U) initiative of the Government of India.

The Durgapur Affordable Housing project is being developed by a joint venture company between InfraCo Asia ad Bengal Aerotropolis Pvt. Ltd (BAPL), the town developer of ‘Sujalaam Skycity’, an integrated residential and commercial development spread across 2,000 acres of land, within which the Durgapur Affordable Housing project will be developed. BAPL is also responsible for developing West Bengal’s domestic airport in Andal, which has been in operation since May 2015.

Residents of the Durgapur Affordable Housing project will benefit from access to its surrounding commercial developments (such as grocery shops, restaurants, banks and other professional services) as well as serve as their anchor customers. This is expected to stimulate the development of the aerotropolis in the long run.

The success of the Durgapur Affordable Housing project is expected to pave the way for greater private sector investment in affordable housing projects in other Tier 2 cities in West Bengal and across India.

Project Overview
Company
IABA Housing Pvt. Ltd.
Country
India
Region
Durgapur, West Bengal
Sector
Social Infrastructure (Affordable housing)
Size
Around 2,000 housing units
Status
Under development
Timeline

Construction expected to commence in June 2020

Total Project Cost
US$ 40.9 million
Funding Committed
US$ 6.0 million
IAI Investment
N/A
Other Shareholder(s)
Bengal Aerotropolis Projects Ltd.
Suppliers

Development Impact

• Estimated to provide around 8,000 people with housing
• Expected to create approx. 1,000 jobs in construction, and up to 40 jobs in operations

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