India Affordable Housing Platform

Financing platform for affordable housing projects in India

Context

The demand for housing in urban India is expected to grow to 35 million units by 2030 due to the growing population and accelerating rural to urban migration. To address this growing demand, the Government of India initiated the Pradhan Mantri Awas Yojana (PMAY) scheme in 2015, for which over 10 million affordable homes have been sanctioned under the PMAY (Urban) vertical as of December 2020. Despite this initiative, there is still a large and growing gap of affordable homes in urban India that needs to be addressed.

Limited availability and high cost of funds for early-stage construction finance for local developers, coupled with limited private sector participation in the affordable housing sector, has affected the scaling up of affordable housing development in urban India.
InfraCo Asia seeks to bridge this early-stage financing gap through the establishment of a first-of-its-kind investment platform for the affordable housing sector, as part of a joint venture with local partner India Housing for All Pte Ltd.

The Project

The investment platform, which aims to finance and construct at least 175,000 affordable housing units by 2030, provide leadership and development capital to local developers who are unable to secure financing for the development phase of each project due to illiquidity and lack of affordable financing in the market. Capital from the platform will be used to fund the early stage development expenses and Phase 1 construction of each project.

The first two prospective affordable housing projects of the investment platform are envisaged to located in the State of Maharashtra. A total of 1,209 units are expected to be built for these 2 projects, of which 382 will be constructed in the Phase 1 and financed by the investment platform.

The investment platform, which is subject to high compliance and reporting standards, is expected to increase the accessibility of India’s affordable housing sector to both financial institutions and retail investors. sector in India.

All affordable housing projects will be developed in accordance with India’s National Building Code, and will endeavour to implement designs that comply with IFC’s “Excellence in Design for Greater Efficiency”, or an equivalent certification such as the IGBC Green Homes ® Certification.

The affordable housing projects are expected to deliver various social and economic benefits, including job creation, supply chain development, capital market deepening, sustainable urban growth, health and education improvements, access to basic services and strengthening of corporate governance. Many of these contribute to the United Nation’s Sustainable Development Goals (SDG), in particular SDG 11 which calls for access for all to adequate, safe, and affordable housing by 2030.

Project Overview
Company
India Housing For All Investment Platform
Country
India
Region
Nationwide, starting from Maharashtra
Sector
Social Infrastructure (Affordable housing)
Size
Project 1: 464 units (Phase 1 - 84 units) Project 2: 534 units (Phase 1 - 298 units)
Status
Under development
Timeline

Q2 2021 – Start of Construction

Total Project Cost
US$ 11.8M (Phase 1 - US$4.2M) US$ 14.1M (Phase 1 - US$6.1M)
Funding Committed
US$ 2.5 million
IAI Investment
N/A
Other Shareholder(s)
India Housing for All Pte Ltd
Suppliers

• India – Legal advisory
• India – Tax structuring
• India – Development partners

Development Impact

• Estimated 5,440 people with improved access to housing and common facilities for the first two projects
• Expected to create 487 short term jobs for first two projects

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