Bihar Signs ₹1 Lakh Crore HUDCO MoU to Finance 12 Greenfield Satellite Townships Including Sasaram

The Agreement and Signatories

The Bihar government and the Housing and Urban Development Corporation Ltd (HUDCO) signed a Memorandum of Understanding on July 3, with the agreement signed between Urban Development and Housing Department Principal Secretary Vinay Kumar and HUDCO Chairman and MD Sanjay Kulshrestha, in the presence of Chief Minister Samrat Choudhary.

Chief Minister Choudhary called it a "historic step", saying the pact with HUDCO for long-term financing of Rs 1 lakh crore would pave the way for the development of 12 greenfield satellite townships in Bihar.

The 12 Satellite Townships and Phased Approach

The lands have been selected in the vicinity of existing major cities and towns in Bihar—Patna, Muzaffarpur, Darbhanga, Chapra, Gaya, Sitamarhi, Saharsa, Purnea, Munger, Bhagalpur, and Sonepur, with Rohtas (Sasaram) as the 12th site.

The greenfield sites have been divided into two groups. The first group comprises Patna, Sonepur, Gaya, Darbhanga, Purnea, Saharsa, and Munger, which are slated for development in phase one. The second group, to be developed subsequently, comprises Sitamarhi, Chapra, Muzaffarpur, and Bhagalpur.

The state Urban Development and Housing Department has announced that the zonal and master plans for the seven cities in the first group would be notified by 31 March 2027, and similar plans for the second group would be notified by 30 June 2027.

Scale and Infrastructure Vision

The satellite townships are to be developed over a geographical area of more than three lakh acres. The project would be developed over more than three lakh acres of land, with farmers becoming stakeholders through a land-pooling model, enabling them to benefit directly from the development.

The greenfield satellite townships will be equipped with modern road networks, drinking water supply, sewerage systems, electricity, green spaces, educational and healthcare institutions, as well as commercial and social infrastructure.

Financing Structure

Housing and Urban Development Corporation Limited (HUDCO) has entered into a Memorandum of Understanding (MoU) with the Government of Bihar to provide term loans amounting to ₹1 lakh crore over a 5-year period. The financing will support urban infrastructure projects, including land acquisition and the development of Greenfield Satellite Cities. The agreement includes flexible repayment terms of up to 25 years and remains valid for 3 years, subject to annual review.

HUDCO will extend financial assistance through a long-term lending structure with a repayment period of up to 25 years. The funding will be released in phases and will include provisions for a moratorium as well as prepayment.

Economic Impact and Private Investment Target

Bihar Chief Minister Samrat Choudhary says the project aims to attract ₹6 lakh crore in private investment and raise the state's urbanisation to 35%.

The initiative would give fresh momentum to Bihar's economic growth by attracting large-scale private and institutional investments, boosting construction activities, and creating lakhs of direct and indirect employment opportunities.

Strategic Context: Addressing Bihar's Urbanization Gap

In April 2026, the Chief Minister of Bihar, Samrat Choudhary, announced that the state would embark on the creation of 12 greenfield satellite townships across the state. The project attempts to bridge the gap in urbanisation between Bihar and other states. Among the major states in the country, Bihar had the lowest urbanisation rate, at 11.3 percent.

What Comes Next

With the MoU signed in July 2026, the development authority will now finalize zonal and master plans. The state Urban Development and Housing Department has announced that the zonal and master plans for the seven cities in the first group would be notified by 31 March 2027, and similar plans for the second group would be notified by 30 June 2027.

In parallel, the Bihar government has proposed the creation of the Bihar Urban Development Authority (BUDA) to drive planned urban expansion through greenfield satellite townships and modern urban centres across the state. The proposed legislation was introduced in the Bihar Assembly on the opening day of the Monsoon Session. Once enacted, the authority will function as the state's nodal body for planning, developing and monitoring major urban infrastructure projects.