IFC, the commercial lending arm of of the World Bank Group, will invest $25 million alongside Tata Value Homes, the 100-per cent subsidiary of Tata Housing, to finance affordable housing projects for low-income households across India.
The project will help bridge the country's significant housing deficit.
IFC's investment will provide Tata Value Homes with long-term capital to develop about 16,800 homes over the next 10 years.
''Our partnership with IFC will help increase availability of affordable, value housing in India,'' says Brotin Banerjee, CEO and MD, Tata Housing. ''Tata Value Homes believes that owning a home is often a catalyst for people to improve their lives. Over the past few years, we have delivered over 5,000 apartments in the price range of $8,000 to $50,000 across various townships. This partnership with IFC will help us become India's largest home provider in the value and affordable housing segment by 2018-19.''
Lack of adequate housing is a major challenge facing emerging markets today. In India, urbanisation, the increasing number of nuclear families, and rising incomes are boosting the demand for housing.
According to Banerjee, there is an estimated shortage of more than 19 million housing units, primarily in underserved urban areas.
Says Vipul Prakash, IFC's director, global corporate coverage, "Tata Value Homes will help lower and middle-income households and young professionals in urban and semi-urban areas to access quality, affordable housing.
"IFC's investment is the first step towards a longer-term partnership to facilitate the development of affordable housing in India and other emerging markets.''
Tata Value Homes aims to emerge the largest home provider in India.
IFC is the largest global development institution focused exclusively on the private sector.