Indian Railway Finance Corporation (IRFC) has signed a loan agreement worth JPY equivalent USD 400 million with a consortium including Sumitomo Mitsui Banking Corporation and MUFG Bank. This is IRFC’s second External Commercial Borrowing (ECB) in FY 2025–26, following a USD 300 million raise in December 2025. The 5-year unsecured loan is benchmarked to Overnight TONAR and will fund railway projects, supporting India’s infrastructure modernization.
IRFC Secures Second Major Foreign Debt Facility
On February 25, 2026, Indian Railway Finance Corporation Limited (IRFC) announced the signing of a significant loan agreement aimed at raising External Commercial Borrowings (ECBs). The agreement was executed with a consortium comprising Sumitomo Mitsui Banking Corporation, GIFT City Branch, and MUFG Bank Ltd, Gift City Branch, in New Delhi.
The total facility size amounts to JPY equivalent USD 400 million. This marks the second such borrowing during the current Financial Year (FY 2025–26), succeeding a JPY equivalent USD 300 million ECB successfully raised in December 2025.
Loan Terms and Utilization
The newly secured ECB carries a tenor of 5 years. The benchmark rate for this facility is set to the Overnight TONAR (Tokyo Overnight Average Rate). The loan is confirmed as an unsecured facility, meaning no specific security was provided to the lenders as part of this agreement, which was executed on February 25, 2026.
The proceeds generated from this funding round are earmarked for financing projects that have either forward or backward linkage with the railway sector, or any other project approved by the Company in compliance with existing ECB Guidelines. The transaction reinforces investor confidence in IRFC’s financial strength and supports the expansion and modernization of India’s railway infrastructure.
Leadership Commentary
Shri Manoj Kumar Dubey, Chairman and Managing Director & CEO, lauded the efforts, noting that the transaction aims at optimizing IRFC’s weighted average borrowing cost and deepening engagement with global capital markets. He emphasized that this funding is crucial for delivering long-term value to the nation by supporting key infrastructure development.
Source: BSE
