Indian Railway Finance Corporation (IRFC) has finalized a loan agreement with Sumitomo Mitsui Banking Corporation for $300 million. The funds, raised as External Commercial Borrowing (ECB), will support railway-related projects. This marks IRFC’s return to the ECB market after three years, aiming to boost infrastructure and reduce borrowing costs. The loan has a tenor of 5 years.
Funding Boost for Railway Infrastructure
Indian Railway Finance Corporation (IRFC) has entered into a loan agreement with Sumitomo Mitsui Banking Corporation. The agreement, signed on December 2, 2025, secures a loan of $300 million equivalent in JPY. The funding will be directed towards projects with either forward or backward linkages to the railway sector.
Loan Details and Purpose
The $300 million External Commercial Borrowing (ECB) has a term of 5 years and is benchmarked to the Overnight TONAR (Tokyo Overnight Average Rate). The proceeds from this facility will finance projects approved by the Company, aligning with ECB Guidelines, and further strengthening railway infrastructure.
Return to ECB Market
This agreement signifies IRFC’s return to the External Commercial Borrowing market after more than three years. The move aims to reduce the company’s weighted average borrowing cost and re-establish its presence in the international market. The funding will support projects integrated with Indian Railways.
Source: BSE