The Gujarat government signed a memorandum of understanding with the Housing and Urban Development Corporation Ltd (HUDCO) on 17 June 2026 in Gandhinagar to secure long-term financing of up to Rs 1 lakh crore for major infrastructure projects across the state. The funding will support the Ahmedabad Metro Rail Phases 2 and 3, new expressways, sports infrastructure and the development of Dholera as a greenfield smart city. The agreement marks one of the largest single-project financing commitments by HUDCO and aligns with the state’s Viksit Gujarat 2047 vision.
What Is HUDCO?
The Housing and Urban Development Corporation Ltd (HUDCO) is a public sector undertaking wholly owned by the Government of India. It was incorporated on 25 April 1970 under the Companies Act, 1956, and operates under the Ministry of Housing and Urban Affairs. HUDCO was granted Navratna status in April 2024, reflecting its strong financial position and operational autonomy.
HUDCO’s primary mandate is to provide long-term finance for housing and urban infrastructure projects in India. Over the decades, it has emerged as the leading techno-financial institution in the country’s habitat development sector. The corporation finances a wide range of projects including water supply, sewerage, solid waste management, roads and transport, power, and social infrastructure. It also offers consultancy services for project preparation, appraisal and monitoring.
Headquartered in New Delhi, HUDCO had a cumulative loan portfolio of over Rs 3.6 lakh crore at its peak and has supported the construction of more than 126 lakh residential units and thousands of urban infrastructure schemes nationwide. Its borrowers are primarily state governments and their agencies, making this MoU with Gujarat a continuation of its core business model.
What the MoU Entails
The MoU was signed between Sanjay Kulshrestha, Chairman and Managing Director of HUDCO, and Sandeep Kumar, Secretary (Economic Affairs) of the Gujarat Finance Department, in the presence of Chief Minister Bhupendra Patel. Finance Minister Kanubhai Desai and Minister of State Kamleshbhai Patel were also present at the ceremony.
The agreement is valid for two years commencing from May 2026. Under the MoU, HUDCO will provide long-term financing of up to Rs 1 lakh crore for identified infrastructure and development projects across Gujarat. The funding will be provided as per HUDCO’s prevailing lending guidelines and norms, with flexible terms including a moratorium period and adjustable repayment schedules.
| Feature | Detail |
|---|---|
| Total Financing Commitment | Up to Rs 1,00,000 crore |
| Validity Period | 2 years from May 2026 |
| Signing Date | 17 June 2026 |
| Venue | Gandhinagar, Gujarat |
| HUDCO Signatory | Sanjay Kulshrestha (CMD) |
| Gujarat Signatory | Sandeep Kumar, Secretary (Economic Affairs) |
The Gujarat government will facilitate necessary permissions, registrations and clearances from relevant departments for projects covered under the agreement. The MoU follows a high-level discussion between Gujarat Chief Secretary MK Das and senior HUDCO officials on securing adequate financial resources for the state’s infrastructure pipeline.
In a parallel development, the state government also signed a separate MoU with the Indian Institute of Management Ahmedabad (IIM-A) on the same day. Under this agreement, IIM Ahmedabad will conduct pre-feasibility studies, feasibility assessments, preparation of detailed project reports (DPRs) and impact evaluations for projects under the Viksit Gujarat 2047 programme.
Key Projects to Be Funded
The Rs 1 lakh crore financing is earmarked for a basket of high-impact urban and transport infrastructure projects that form the backbone of Gujarat’s long-term development strategy.
Ahmedabad Metro Rail Phases 2 and 3
The Ahmedabad Metro is a rapid transit system serving Ahmedabad and Gandhinagar, operated by the Gujarat Metro Rail Corporation (GMRC). Phase 1 of the project, covering about 40 km with two corridors, was inaugurated in March 2019. Phase 2, which adds another 28 km connecting Motera Stadium to Mahatma Mandir and GNLU to GIFT City, was substantially completed by early 2026.
The HUDCO funding will support further expansion under Phase 2 extensions and Phase 3, which includes a new line from Thaltej to Godhavi at an estimated cost of Rs 2,825 crore and a 6 km airport link connecting Sardar Vallabhbhai Patel International Airport to Koteshwar Road. These extensions will bring the metro network closer to Ahmedabad’s rapidly growing western suburbs and improve last-mile connectivity to the airport.
Dholera Smart City Development
Dholera is India’s first greenfield smart city, developed as part of the Delhi-Mumbai Industrial Corridor (DMIC) project. Situated about 100 km southwest of Ahmedabad, the Dholera Special Investment Region (SIR) spans 920 sq km making it one of the largest planned smart cities in the world. Its activation area of 22.5 sq km is nearing completion with roads, water supply, drainage and power infrastructure already in place.
The HUDCO financing will accelerate the creation of world-class modern infrastructure in Dholera, including its international airport and industrial zones. Dholera has already attracted major investments including the Tata Semiconductor Manufacturing Facility and is positioned as a future hub for electronics, defence and high-tech manufacturing. The Ahmedabad-Dholera Expressway, inaugurated in March 2026, has reduced travel time between the two cities, further boosting Dholera’s connectivity.
Expressways and Sports Infrastructure
The MoU funding will also support the construction of greenfield expressways announced under the state budget, including the Namoshakti Expressway (Deesa to Pipavav, 430 km) and the Somnath-Dwarka Expressway (680 km), which will significantly improve highway connectivity across Gujarat. These expressways are expected to ease freight movement, boost tourism along the religious circuit and reduce travel time between major cities.
Additionally, funding has been earmarked for international-standard sports complexes and stadiums as Gujarat prepares to host the 2030 Commonwealth Games. The state budget for 2026-27 allocated Rs 1,278 crore specifically for sporting and transport infrastructure to develop Ahmedabad and other major cities as Olympic-ready destinations.
Aligned with Viksit Gujarat 2047
The MoU with HUDCO is a key financial instrument in Gujarat’s ambitious Viksit Gujarat 2047 vision. Unveiled at the Vibrant Gujarat Global Summit 2024, the vision document was the first of its kind by any Indian state and aligns with Prime Minister Narendra Modi’s Viksit Bharat 2047 goal of making India a developed nation by its centenary of independence.
The Viksit Gujarat 2047 roadmap includes targets to achieve a GSDP of USD 3.5 trillion, raise per capita income to USD 38,000 to USD 40,000 and achieve net zero emissions by 2047. It also aims to boost women’s employment participation to 75 per cent and increase average life expectancy to 84 years through robust health infrastructure.
To drive this vision, the state government established a dedicated funding mechanism called the Viksit Gujarat Fund, worth Rs 50,000 crore over five years, to catalyse projects across infrastructure, tourism, transport, education and green growth. The HUDCO financing of Rs 1 lakh crore provides a parallel capital pipeline specifically for urban and transport infrastructure, complementing the state’s own budgetary allocations.
The state budget for 2026-27 allocated Rs 33,504 crore to the Urban Development and Urban Housing Department, including Rs 16,116 crore for the Swarnim Jayanti Mukhyamantri Urban Development Scheme, with a special focus on making cities Olympic-ready for the 2030 Commonwealth Games.
Key Takeaways
- The Gujarat government and HUDCO signed an MoU on 17 June 2026 for long-term financing of up to Rs 1 lakh crore for infrastructure projects.
- HUDCO was established on 25 April 1970, is headquartered in New Delhi, operates under the Ministry of Housing and Urban Affairs, and was granted Navratna status in 2024.
- The funding will support Ahmedabad Metro Phases 2 and 3, Dholera Smart City, greenfield expressways and sports infrastructure for the 2030 Commonwealth Games.
- The MoU is valid for two years from May 2026 and was signed by Sanjay Kulshrestha (CMD, HUDCO) and Sandeep Kumar (Secretary, Gujarat Finance Department).
- A parallel MoU with IIM Ahmedabad was signed for pre-feasibility studies and DPR preparation under the Viksit Gujarat 2047 programme.
- The Viksit Gujarat 2047 vision targets a GSDP of USD 3.5 trillion and net zero emissions by 2047.
