HUDCO Approves ₹9,304 Crore Loan for Tunnel Road Project

Rapid Summary

• HUDCO has sanctioned a loan worth ₹9,303.66 crore to Bengaluru Smart Infrastructure Ltd (B-SMILE) for building the North-South corridor of the Twin Tunnel Road project.
• The North-South corridor spans 16.8 km and the total estimated cost of construction is ₹17,780.13 crore.
• As per the sanction letter dated August 4, 2025:

– The loan tenure is set at 24 years and 2 months (290 months), with a draw period of 4 years and repayment over 20 years.
– Interest for the first year is fixed at an effective rate of 8.95%, including a rebate of 0.10%.

• Loan disbursement will occur in agreed phases and be guaranteed by the State government.
• B-SMILE must provide supporting documents, sign an agreement, and display HUDCO acknowledgment signs at project sites.

Indian Opinion Analysis

The approval of such a significant loan underscores India’s focus on creating advanced infrastructure to address urban mobility needs in cities like Bengaluru, which are plagued by traffic congestion. With such projects being financed through long-term structured loans backed by state guarantees, it reflects confidence in public-private partnership models for developmental ventures.

However, triumphant implementation hinges on adherence to timelines during construction and compliance with financial terms laid out by HUDCO-including proper documentation and visibility requirements for credit acknowledgment-which could present logistical challenges given Bengaluru’s scale and complexity as a megacity.

While fostering economic growth via infrastructure investment is commendable,stakeholders need to ensure that sustainability measures are integrated into this ambitious project to mitigate any long-term environmental impact or disruptions during execution phases.

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