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WATER AND SANITATION POOLED FUND

BACKGROUND

Water and Sanitation Pooled Fund (WSPF) was set up in August 2002 as a Trust under the provisions of Indian Trust Act 1882. The Government of Tamil Nadu is the Settlor of the Trust. The objective of the Trust is to mobilize resources from the capital market by issue of pooled municipal bonds and to finance viable urban infrastructure projects. This Trust is functioning on no-profit no-loss basis. This is the first entity in the country to mobilize resources on the pooled finance framework.

The Government of Tamil Nadu has designated WSPF as the State Pooled Finance Entity under Pooled Finance Development Fund Scheme and authorized it to operate according to the guidelines issued by the Government of India.

The direct access to capital market for small and medium size ULBs are facilitated by pooled fund mechanism. Under this, project and financial requirements of several ULBs are pooled together, in order to make sizable lot to approach capital market with appropriate alternative and innovate financial instruments. The projects are selected after careful consideration of their financial viability and commitment towards development.

OBJECTIVES OF WSPF

The main purpose of the Fund is to channel increased financial resources including private financing, into high priority infrastructure investment, contributing directly to improved living standards of urban population. The objectives of the Trust are:

  • Mobilize resources for urban infrastructure projects under pooled finance structure,
  • Provide financial assistance for setting up infrastructure projects,
  • Enable urban local bodies to access debt finance from market and
  • Act as Nodal Agency on behalf of Central and / or State Government for water, sanitation and / or any other infrastructure projects.

MANAGEMENT OF WSPF

WSPF is managed by Board of Trustees and the Board of Trustees comprises of officials of Government of Tamil Nadu as detailed below:

Principal Secretary to the Government,
MA & WS Department Department

Chairman

Additional Secretary to the Government,
Finance Department

Trustee

Secretary to the Government,
Planning & Development Department

Trustee

Principal Secretary to the Government,
Housing & Urban Development Department

Trustee

Managing Director, TNUIFSL

Member - Secretary

 

The Board of Trustees of the Fund prescribes policies and procedures for the operation of the Trust. Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) acts as Fund Manager of WSPF.

RESOURCE MOBILIZATION

WSPF had raised a sum of Rs.302.30 crs by issue of bonds under pooled finance framework as detailed below:

Amount mobilized ( Rs. in crs)

30.41

6.70

83.19

51.00

51.00

80.00

Interest rate

9.20%

7.25%

7.50%

10.60%

8.71%

8.25%

Tax Status

Taxable

Tax-free

Tax-free

Taxable

Taxable

Taxable

Credit Rating

AA(SO)

AA(SO)

AA(SO)

AA(SO)

AA(SO)

AA(SO)

Tenor

15 Years

10 years

10 years

10 years

10 years

12 years

No. of beneficiary ULBs

13

5

7

10

10

5

BSF / CREF / Cash Collateral ( Rs.in crs)

6.90

1.50

18.50

19.00

14.50

Month and Year

December
2002

April
2008

September
2010

August
2012

May
2013

May
2017

Balance outstanding as on 31.03.2018 ( Rs.in crs)

-

1.34

43.37

51.00

51.00

80.00

The participant ULBs are regular in payment of debt service to WSPF. The WSPF has honoured all the bond service payments on the respective due date(s). Of the above, the first bond mobilized during the year 2002 has been fully redeemed. The total bond issue of Rs.302.30 crores, a sum of Rs.75.59 crores has been redeemed and the outstanding bond balance as on 31.03.2018 is Rs.226.71 crores.

National River Conversation Project (NRCP)

The Government has nominated the WSPF as the nodal agency for arranging funds (towards State Government’s Contribution) for implementation of the Under-Ground Sewerage Projects under NRCP in the year 2003. Accordingly, a sum of Rs. 93.99 crores has been borrowed by WSPF from Tamil Nadu Urban Development Fund towards State Government’s share of contribution under NRCP and the same has been provided for implementation of the schemes. The loan balance as on 31.03.2018 is Rs. 12.12 crores. The debt service of loans borrowed by WSPF is provided by Government of Tamil Nadu through budgetary allocation, every year.

National Lake Conversation Project (NLCP)

The Government nominated the WSPF as the nodal agency for arranging funds (towards State Government’s Contribution) for implementation of the Kodaikanal Lake Conservation Project implemented under NLCP in the year 2004. Accordingly, a sum of Rs. 1.73 crores has been borrowed by WSPF from Tamil Nadu Urban Development Fund towards State Government’s share of contribution under NLCP and the same has been provided for implementation of the schemes. The loan balance as on 31.03.2018 is Rs. 0.40 crores. The debt service of loans borrowed by WSPF is provided by Government of Tamil Nadu through budgetary allocation, every year.

Loan availed from HUDCO

The Government has issued orders to avail loan of Rs.300 crs from HUDCO with Government Guarantee for on lending the same to the 12 beneficiary ULBs for implementation of Vellore Combined Water Supply Improvement Scheme. Accordingly, the entire loan amount of Rs.300.00 crores has been availed from HUDCO and disbursed to 12 beneficiary ULBs. The loan balance as on 31.03.2018 is Rs.270.81 crores. The debt service of loans borrowed by WSPF is provided by Government of Tamil Nadu through budgetary allocation, every year.