HUDCO has a policy to insist on sewerage schemes simultaneously wherever water supply projects are coming up to take care of the environment. HUDCO has funded sewerage projects in the country which include on-site individual facility like 2-pit pour flush units, septic tanks, biogas digesters; or community facility on centralized or decentralized manner like septic tanks, biogas digesters, oxidation ponds, conventional sewage treatment plants with laying of complete sewerage collection system and treating the effluent to the required level. The projects with tertiary treatment plant and reuse of waste water for industrial purpose have also been funded. International funding form JBIC/ ADB / USAID for environmentally sustainable projects have also been channelized by HUDCO for the development in the Country.

The systems funded were for augmentation, rehabilitation, extension as well as new schemes for un-serviced areas. Stress is laid on formulation of schemes as per topography, population density, rate of water supply, existing system, funds availability and design parameters as per CPHEEO manual. In these projects recovery of loan dues and collection of at least operation and maintenance cost is the main consideration.

HUDCO has funded waste water projects to Water Supply & Sewerage Boards of the States, ULBs, PHE departments, Jeevan Pradhikaran, EPC contracts with Private participation, Trusts, etc. HUDCO has help central government in implementation of toilet facility at individual, community and public level under the Action Plan programme of Basic Sanitation, Integrated Low Cost Sanitation, VAMBAY, Foot Path Dwellers, Night Shelter Schemes etc. The State governments have also been assisted in taking up their own sanitation coverage drive where the central subsidy was not available. HUDCO has taken up its own subsidy programme per seat for public / community toilets with innovative funding mechanism of utilizing MPLAD funds and involving NGOs and ULB. HUDCO also funded mobile toilets at Khumb Mela with complete treatment and material recovery mechanism in association with premier technical institute under Corporate Social Responsibility(CSR funds).

HUDCO contribution has helped the Nation in increasing the coverage of population with waste water treatment and supply of desirable quality and quantity. The target now is to treat 100% waste water generated in the urban areas and recycle at least 20% for non-potable purpose.