The Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) has raised $100 million through an external commercial borrowing (ECB) loan from Japan’s MUFG Bank Ltd, the bank said in an email statement.
The loan gas been backed by a credit enchancement guarantee by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group. “This landmark transaction, to be facilitated through MUFG Bank’s GIFT branch, will mark the first-ever commercial financing for DFCCIL and debut MIGAcovered transaction in India,” MUFG said in a statement.
Government of India controlled DFCCIL is the dedicated to construct and manage freight railway corridors across the nation, which will decongest existing transportation networks and promoting more efficient, reliable, and sustainable transport infrastructure.
Shashank Joshi, deputy CEO, MUFG India, said this financing structure will serve as a template for alternative financing solutions capable of propelling India’s accelerated infrastructure development.
World Bank’s MIGA provides political risk insurance and credit enhancement solutions for projects.
“This loan has the potential to create a new avenue for funding large-scale infrastructure projects and other enterprises in the country,” said Hira Ballabh, director finance, DFCCIL.