In a major boost to infrastructure development, the Government of Maharashtra has approved a state guarantee for a ₹6,000 crore loan to fund land acquisition for the proposed Purandar Airport near Pune.
The decision was formalized through a Government Resolution issued by the Finance Department on April 24, 2026, following cabinet approval earlier this year.
What the Decision Means
The government has allowed the Maharashtra Industrial Development Corporation (MIDC) to:
- Raise up to ₹6,000 crore loan
- Borrow from Housing and Urban Development Corporation or other financial institutions
- Secure funding at competitive interest rates
- Use the funds specifically for land acquisition for the airport project
Importantly, the state government will act as guarantor for this loan.
Key Conditions of the Government Guarantee
The approval comes with strict financial safeguards:
1. Limited Guarantee
- The state guarantee is capped at ₹6,000 crore
2. Loan Timeline
- MIDC must raise the loan within 12 months
3. Primary Liability
- MIDC will remain the principal borrower (debtor)
4. Repayment Responsibility
Loan repayment will not directly fall on the state, but on a Special Purpose Vehicle (SPV) created for the project.
Who Will Repay the Loan?
A dedicated Purandar Airport SPV will handle repayment, with the following stakeholders:
- MIDC – 15%
- Maharashtra Airport Development Company – 19%
- City and Industrial Development Corporation – 51%
- Pune Metropolitan Region Development Authority – 15%
Each entity will bear repayment in proportion to its shareholding.
When Will the State Step In?
The government will step in only under exceptional circumstances, such as:
- If the SPV fails to repay due to unavoidable financial stress
- After reviewing the financial condition of the SPV
Otherwise, the liability remains off the state’s balance sheet.
Additional Financial Safeguards
- Financial institutions must notify the government of any default within 90 days
- MIDC must submit:
- Monthly repayment progress reports
- Half-yearly financial reports
- Loan must be used only for land acquisition
Guarantee Fees & Penalties
MIDC will pay a guarantee fee of 0.5% on the loan amount.
Penalty for delay:
- 16% interest for first 3 months
- 24% thereafter
Why This Matters
The Purandar Airport project is expected to:
- Decongest Pune Airport
- Boost regional connectivity and logistics
- Accelerate real estate and industrial growth in Pune region
This funding structure shows how Maharashtra is using state guarantees to unlock large infrastructure financing without immediate fiscal burden.
Big Picture
With this move, Maharashtra is:
- Leveraging institutions like HUDCO
- Enabling faster land acquisition
- Creating a multi-agency funding model
- Reducing direct strain on state finances
Final Takeaway
The ₹6,000 crore guarantee is a critical enabler for the long-delayed Purandar Airport project. While the state backs the loan, the actual repayment risk lies with the project SPV, making it a structured and controlled financing approach.
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