Tata Housing today said it has signed an agreement with the Gujarat government to invest Rs 3,500 crore to build affordable homes at Ahmedabad.

Tata Housing, part of Tata group, said a non-binding MoU (memorandum of understanding) of Rs 3,500 crore has been signed yesterday with the Gujarat government at the Vibrant Gujarat Summit in Gandhinagar.

The MoU was signed by Tata Housing Managing Director and CEO Brotin Banerjee in the presence of Gujarat Chief Minister Narendra Modi.

"We have signed an MoU with Gujarat government as we want to develop housing project," Banerjee said, adding that it would take some time to enter into a final agreement.

The project, to be developed under the public-private partnership (PPP) model, would come up on over 100 acres with an estimated number of housing units of over 6,000, he added.

"As part of our long term strategy, we are looking at creating homes in the emerging Tier I and Tier II cities. With Gujarat and specially Ahmedabad being one of India's most desirable cities to live in, this MoU will support our efforts in building sustainable townships for urban dwellers at affordable price points," Banerjee said.

The Gujarat government envisions construction of over 28 lakh affordable homes in rural areas and 22 lakh homes in urban area, worth USD 30 billion over 5 years, the statement said.