NHB became India’sregulatory institution for housing finance as well as a purchaser of qualified mortgage loans. NHB’smandate also allowed it to provide some direct financing for low-income households.
Making policies in relation with commercial viability of urban infra projects, funding by usaid for urbaan infra projects, debt market i.e. urban infra finance market for the projects
The approach to working in the sector has been iterative and cyclical: (1) identifying the main challenge areas; (2) diagnosing the underlying causes of those problems; (3) designing innovative solutions and testing them; (4) reforming policy to help make the solutions effective and sustainable; (5) disseminating lessons learned from the experiences and training others in the technical aspects; and (6) replicating the successful solutions on a larger scale.
These were regarded something like social welfare services that could not be structured on a commercial format.
Fire d project
BY ONIKA ARORA
• Early 1990s, various economic growth initiatives supported by
USAID, including housing mortgage finance.
• Only 2 housing finance companies initially, the Housing
Development Finance Corporation (HDFC), and the Housing and
Urban Development Corporation (HUDCO).
• National Housing Bank (NHB) established in 1987 by the GoI.
• Between 1988 and 1993, more than 80 housing finance companies
established and registered through NHB.
ISSUES LEADING TO FIRE-D
• Deficiencies in the infrastructure delivery system.
• Alternatives to the traditional, publically funded and managed approach
required for developing and maintaining infrastructure.
• A study(1990) on Delhi’s land development process revealed that:
– The lack of potable water, sewerage, and solid waste, poor quality of life for
low- and middle-income households.
– Neither the public nor private sector capable of delivering a sufficient supply
of affordable developed land to low- and middle-income households.
– Unless major changes to the land and infrastructure supply processes,
combined with a way to make housing more affordable, the growth of
informal settlements would continue.
• The Indo-USAID programme Financial Institutions Reform and Expansion
Program—Debt & Infrastructure.
• Launched in 1994 in support of the GoI’s initiatives to decentralize government
authority to the local level.
• Main objectives:
– Establishing a system for financing infrastructure to support development of
debt market in India by using the Housing Guarantee (HG) funds for issuing of
debt instruments to finance urban infra-projects.
– Orienting urban infrastructure projects in a commercially viable manner to
attract private investment.
– Promoting better urban governance.
• The design process for the Project initiated in 1990 to address the issues
on the study.
• Stakeholder driven design process as decided by USAID (which is not the
norm for preparing international donor-funded projects).
• Core group of stakeholders:
– The collaborating agencies USAID and Ministry of Urban Development
and Poverty Alleviation.
– NIUA, nodal agency to promote, analyse and disseminate the policy
change agenda, to coordinate and conduct capacity building training
workshops in the demonstration cities.
• Core group of stakeholders(in continuation):
– Financial intermediaries, HUDCO IL&FS.
– An expert consultancy group of 2 US companies, The Communities
Group (TCG) International and Planning and Development
Collaborative (PADCO) management services: project management
support services and technical assistance to the program partners.
• USAID: Technical assistance, funds US $125 million(HG funds) for a
period of 30 years to develop an urban infrastructure finance system.
• HUDCO and IL&FS: Financial intermediaries to channel the funds by
USAID, locally raised funds to municipalities or private sector
entities to finance selected commercially viable urban
infrastructure (water supply, sewerage, solid waste management
and area development).
• 16-year duration of the FIRE (D) Program.
• Direction for work at the central, state, and local levels.
PHASES OF FIRE-D
• Three distinct phases. :
• First phase (1994–1999):
– Design and implementation of model commercially viable infras-
projects (CVIPs) and private sector participation (PSP) demonstration
– Minimal state government intervention in urban reforms .
• Second phase(1999-2003):
– Attempted to institutionalize better project development practices
and critical urban reforms at a larger scale primarily through
• creation of state-level nodal agencies.
• state-level interventions on policy, financing, and regulatory issues
• development of a national training network.
• national urban governance reform initiatives.
• the setting up of state City Managers Associations (CMAs).
• Third phase (2004–2008, with extension into 2011):
– Integration of the various policy and project implementation
aspects of the FIRE-D Program.
– A more comprehensive approach to urban sector reform, for
increasing investment in urban infrastructure, specifically
benefitting the poor.
– Incorporating the poor more centrally in the infrastructure
• FIRE-D provides both framework and guidelines on how to set
• While designing and implementing the various project
development, institutional, policy, and legislative activities,
the FIRE (D) Program employed an iterative process/project
• Motivation and interest created in the cities without FIRE-D implementation to
think of alternative ways of financing urban infrastructure.
• Interest created amongst the financial institutions for funding urban infrastructure
• Innovative urban management practices in some of the cities in terms of public-
private partnerships (PPP).
• Changing the mind-set of planners, urban managers and policy makers relating to
commercial viability of infrastructure and services like water supply, sewerage and
solid waste management.
• The FIRE (D) concepts and tools have attracted other international donor agencies,
financial institutions, project development boards and the private sector.