Telangana Govt Gets ₹13,600 Crore Loan From IRFC For Metro Rail
In Delhi, IRFC CMD Manojkumar Dubey and CS K. Ramakrishna signed on the related documents to this effect. With a 20-year time limit and payment scheduled for every trimester, the loan would be extended to Hyderabad Metro
Hyderabad: The Telangana government on Monday signed a memorandum of understanding (MoU) with Indian Railway Finance Corporation (IRFC) for refinancing a 13,600-crore loan raised for the Hyderabad Metro Rail project.
The agreement was signed in Delhi between IRFC, L&T Metro Rail (Hyderabad) Limited and Hyderabad Metro Rail Limited. IRFC chairman and managing director Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao participated in the programme.
The refinancing arrangement comes after the Telangana government recently acquired the `13,600 crore debt of L&T to facilitate the takeover of the Metro Rail project phase-1. Following the acquisition of the entire stake in L&T Metro Rail (Hyderabad) Limited from Larsen & Toubro Limited through HMRL, the Hyderabad Metro project has now become a fully government-owned strategic public transport asset.
Under the refinancing arrangement, the Telangana government will repay the loan to IRFC over a period of 20 years through quarterly payments. While L&T had earlier secured loans from commercial banks at higher interest rates, the state government obtained funding from IRFC at lower interest rates. By replacing the high-cost commercial borrowings with lower-cost long-term rupee financing from IRFC, the state government has significantly reduced the financial burden on the state exchequer.
The ₹13,600 crore refinancing facility will be utilised for refinancing existing liabilities, including non-convertible debentures, commercial papers and working capital borrowings. Officials said the arrangement would ensure an orderly exit for existing lenders while substantially improving the long-term financial sustainability of the Metro Rail project.
The transaction is backed by strong credit enhancement mechanisms, including an unconditional and irrevocable payment guarantee by the Telangana government, a state government guarantee and an RBI-supported direct debit mandate.
Chief Secretary K. Ramakrishna Rao said that under the leadership of Chief Minister A. Revanth Reddy, the Telangana government, was committed to developing an efficient, sustainable and people-friendly public transport system in Hyderabad.
He said Hyderabad was emerging as a major centre for the country’s economic growth, and the expansion of Metro connectivity was essential to meet the demands of the city’s development.
