A Canadian pension fund is looking to invest $2 billion in affordable housing projects in Mumbai, said Maharashtra’s chief minister Devendra Fadnavis while addressing a group of real estate executives and bankers at a recent conference.
More than half of Mumbai’s 20 million inhabitants live in slums – at least one million reside in Dharavi, the biggest slum in Asia.
The people who live here endure cramped conditions, poor ventilation and a lack of toilets,” local media said.
These conditions have also become particularly Zika virus-friendly during the summer monsoon season, when heavy rains flood the slums, leaving pools of standing water where mosquitoes can flourish.
TNN reported that the Maharashtra state government is finalizing a memorandum of understanding (MoU) with a Canadian government pension fund and two Mumbai developers to build over 350,000 affordable homes e through the Slum Redevelopment Authority (SRA).
If approved, the two builders, Deserve Group and Radius Group, will be able to exploit prime slum plots from Cuffe Parade to Borivli with the help of the SRA, which will expedite permissions for them.
"The pension fund may invest up to $2billion (Rs 13,600crores) in the project. We are still fine-tuning some of the clauses before finalizing it," a top government source told Times Of India. 
The developers, along with the pension fund, are expect to sign a tripartite agreement with the SRA. IL&FS has been appointed fund manager. "The two developers will have to obtain letter of intent (LOI) themselves. They will not get any preferential treatment for that. But once they receive LOI, the SRA will put them on the fast track," the sources added.
SRA CEO Aseem Gupta said the state was awaiting confirmation from Canadian government officials. "The draft is yet to be cleared by SRA," he said.
"The government wants to sell homes at a cheap rate of say  $100 a sq ft. The Canadian Pension Fund will put in money only for the construction," said a person close to one of the developers. But government sources said the rate will be decided by SRA.
"The SRA's role is basically to fast-track permissions. Apart from providing new tenements to slum dwellers, the developers have offered to build affordable housing in the sale component, which can be made available to people at a low rate," said sources. 
The two builders can expect a windfall by exploiting portions of the slum plots to build high end residential or commercial towers, which they can sell at market rate. The SRA, through private builders, has been able to provide less than two lakh houses to slum dwellers in the past two decades as against the 40 lakh homes promised when the scheme was introduced in 1996, TOI said.
The cross-subsidy scheme has been wrecked by charges of corruption, malpractices and arm-twisting of slum residents by slum lords and land mafia.
Some of the most expensive residential skyscrapers have come up on slum land. Housing experts have complained that slum residents are rehabilitated on a small portion of the plot in box sized multi-storeyed apartments while the larger chunk of 
Fadnavis added that there is growing interest among financial institutions to invest in various affordable housing projects across the country.
“Last week I met the Canadian ambassador. He informed me that the Canadian pension fund is ready to invest $2 billion in affordable housing. There is a lot of interest from other financial institutions to invest in this sector,” said Fadnavis. The chief minister did not specify which Canadian pension fund is looking to invest in affordable housing projects in the city.
Earlier, Mark Wiseman, the chief executive officer of the Canada Pension Plan Investment Board (CPPIB), which manages 268.6 billion Canadian dollars ($203.09 billion) in pension fund assets, was in India. At an interaction with Mint, Wiseman said that CPPIB will look to increase its exposure to the Indian consumer.
“I think over time we will see real opportunity there (consumer) like in other growth economies. Over time, we want more attachment with Indian consumers as India becomes a larger economy. We are very focusedly looking at co-investments in this sector,” Wiseman told Mint.
CPPIB currently has $2 billion invested in India across the infrastructure and real estate sectors.