HUDCO okays ₹9,303.66 crore loan for Tunnel Road project

The Housing and Urban Development Corporation (HUDCO) has issued a loan sanction letter to Bengaluru Smart Infrastructure Ltd (B-SMILE), approving a loan of ₹9,303.66 crore for the construction of the first corridor of the Twin Tunnel Road project (North-South corridor).

HUDCO has instructed the Special Purpose Vehicle (SPV) B-SMILE to furnish the required supporting documents and execute a formal agreement before the loan is operationalised. The North-South corridor, which stretches 16.8 km, is estimated to cost ₹17,780.13 crore.

According to the sanction letter dated August 4, 2025, reviewed by The Hindu, the loan will primarily be disbursed on the guarantee of the State government. The loan will have an interest rate of 8.95% for the first year, finalised after a rebate of 0.10%.

The loan has a total tenure of 24 years and 2 months (290 months), which includes a draw period of 4 years and 2 months (50 months), followed by a repayment period of 20 years (240 months). The disbursement of funds will be carried out in mutually agreed phases, according to the letter.

The letter further stipulates that B-SMILE must display signboards at all project sites, particularly in high-visibility locations, clearly acknowledging HUDCO’s financial assistance.