Telangana Waives 2% Commission On `2,944 Cr Hudco Loan For Musi, Godavari Schemes

HYDERABAD: The Telangana government has finalised key financial backing for the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) by waiving a 2 per cent guarantee commission on a ₹2,944-crore loan sanctioned by the Housing and Urban Development Corporation (Hudco).

The funding covers the state government’s 40 per cent share in the ₹7,360-crore project. The project is being executed under the hybrid annuity model, under which the remaining 60 percent of the cost is invested by the selected private agency.

Under the updated agreement, the state government will provide a formal sovereign guarantee along with committed budgetary support to handle both principal and interest repayments to Hudco throughout the tenure of the loan.

Earlier negotiations saw Hudco reduce the annual interest rate on the term loan from 8.97 per cent to 8.85 per cent. Following this rate adjustment, the government decided to completely exempt HMWS&SB from the 2 per cent guarantee commission typically required for state-backed loans, citing the public importance of the drinking water and river restoration works.