Indian Railway Finance Corporation (IRFC) has entered into a loan agreement with Sumitomo Mitsui Banking Corporation for $300 million. This External Commercial Borrowing (ECB) will fund projects linked to the railway sector. The loan, with a 5-year tenor, marks IRFC’s return to the ECB market after three years, aiming to boost railway infrastructure and lower borrowing costs.
New Funding Secured
Indian Railway Finance Corporation (IRFC) has formalized a loan agreement with Sumitomo Mitsui Banking Corporation, GIFT City Branch, to raise $300 million through an External Commercial Borrowing (ECB). The agreement was signed on December 2, 2025, marking a significant move to bolster infrastructure financing.
Loan Details
The $300 million ECB is structured with a tenor of 5 years and is benchmarked against the Tokyo Overnight Average Rate (TONAR). This financing is earmarked for projects with either forward or backward linkages to the railway sector, aligning with the company’s core mission. The loan will be deployed in projects approved under the prevailing ECB Guidelines.
Strategic Rationale
This move signifies IRFC’s return to the External Commercial Borrowing market after a hiatus of more than three years. The goal is not only to cut the weighted average cost of borrowing but also to enhance its presence in international markets. IRFC aims to fortify railway infrastructure, contributing to national development by mobilizing resources at competitive rates.
Source: BSE