HYDERABAD (Metro Rail News): In a significant drive for urban rail financing the Indian Rail Finance Corporation (IRFC) has signed a term loan agreement with L&T Metro Rail (Hyderabad) Limited for ₹13,527 crore to refinance the debt obligations of the Hyderabad Metro Rail project. This marks a major refinancing transaction in India’s urban transit sector.
This agreement follows the transfer of 100 per cent ownership of L&T Metro Rail (Hyderabad) Limited from Larsen & Toubro Limited to the Government of Telangana through Hyderabad Metro Rail Limited. This contract will refinance existing debt obligations, including non-convertible (NCDs), commercial papers and term loans, enabling an orderly exit for existing lenders while improving the project’s long-term financial sustainability.
The agreement was signed in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K.Ramakrishna Rao. Mr. Manoj Kumar, CMD & CEO, IRFC said that, this transaction reinforces IRFC’s growing capability to structure innovative, long-tenor financing solutions for nationally significant infrastructure assets. It also reinforces our commitment to supporting sustainable urban mobility through efficient capital mobilisation.
This contract is structured over a 20-year tenure with quarterly repayments, the refinancing replaces higher-cost debt with competitively priced long-term rupee financing. The facility carries no processing fees, commitment charges or prepayment penalties, making it an efficient and borrower-friendly refinancing mechanism. This move is set to materially strengthen the project’s financial flexibility, enabling the Government of Telangana to accelerate the planned expansion of Hyderabad’s metro network, including new corridors and enhanced connectivity.
This transaction is supported by a robust credit enhancement framework, including an unconditional and irrevocable undertaking by the Government of Telangana for servicing all dues payable to IRFC, a state government guarantee, and an RBI-backed direct debit mandate.
Dubey further added: “This transaction demonstrates that large-scale urban infrastructure can be financed domestically through efficient, long-tenor funding structures aligned to project cash flows. IRFC stands ready to serve as a trusted domestic financing partner, channeling Indian savings into India’s infrastructure on Indian terms.
The Hyderabad metro Phase-1 is the world’s largest metro rail project developed under the public-private partnership (PPP) model, spanning around 69.2 kilometers across 3 metro corridors and serves more than 5 lakh passengers on a daily basis. This agreement marks as a crucial step towards a more sustainable, seamless and efficient travel across the city.
Also Read: DMRC floats DDC tender for 3 elevated stations of Phase 5(A)