HUDCO set up a Waste Management Cell in 1994 for promotion of municipal waste management. HUDCO extended financial and technical assistance for integrated solid waste management system which include computation of capacity of vehicles required for waste collection and transportation; establishment of bio-methananation/ RDF/ pellatization plants for promotion of energy recovery; or selection of aerobic/ anaerobic composting plants for material recovery; requirement of land for sanitary landfill to dispose the rejects in environmentally appropriate manner. HUDCO also propagated separate handling of hazardous hospital waste and transferring it to common incineration facility in the ULB. The charges for management of hospital waste are generally based on quantity of waste generated from hospitals, path labs, dispensaries etc.

HUDCO extended soft loan based on the international subsidy routed through MNES/ MNRE for waste to energy projects (bagasse-based co-generation plants) under the funding for minimization of Green House gases. HUDCO has also funded Municipal Solid Waste projects for energy / material recovery projects on BOO/BOOM basis. These types of projects are operated on Public - Private Partnership projects, based on tripartite agreement between lender, private operator and the Municipality. The project land is on lease and collection rights of MSW or tipping fees is agreed upon by the urban local body with the private operator.