Indian Railway Finance Corporation Ltd (IRFC), the dedicated financing arm of Indian Railways, has refinanced a ₹9,821 crore foreign currency loan availed by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) from the World Bank, resulting in an estimated interest savings of ₹2,700 crore for the Government of India.
Mumbai-listed IRFC said it has signed a Rupee Term Loan Agreement of ₹9,821 crore with DFCCIL to refinance the existing foreign currency debt taken from the World Bank’s International Bank for Reconstruction and Development (IBRD) for the Eastern Dedicated Freight Corridor (EDFC) project. The agreement was executed on December 23, and the entire loan amount has already been disbursed.
The agreement was signed in the presence of Chairman and Chief Executive Officer of the Railway Board, Satish Kumar, along with senior officials from IRFC and DFCCIL.
According to IRFC, the refinancing marks a significant milestone in India’s infrastructure financing landscape, highlighting the increasing depth, maturity and capability of domestic financial institutions to fund large-scale, long-gestation infrastructure projects without reliance on foreign currency borrowings.
By shifting from foreign currency debt to rupee-denominated financing, DFCCIL will benefit from reduced exposure to exchange rate volatility, improved predictability of debt servicing, and better alignment of long-term liabilities with its rupee-based revenue streams. This is expected to enhance cash flow management and strengthen the financial sustainability of the project.
The Eastern Dedicated Freight Corridor is a flagship national infrastructure project aimed at transforming freight transportation in India. The corridor is designed to decongest passenger rail lines, improve logistics efficiency, reduce transit time and support industrial growth across the northern and eastern regions of the country.
“This refinancing marks a landmark step in India’s infrastructure financing journey and reflects IRFC’s pivotal role in bringing financial efficiencies to the railway ecosystem,” said Manoj Kumar Dubey, Chairman and Managing Director of IRFC.
As the dedicated financing arm of the Ministry of Railways, IRFC has consistently supported critical railway infrastructure projects. The refinancing underscores its commitment to strategic assets such as the Dedicated Freight Corridors and its readiness to support future DFCCIL projects through domestic financing solutions.
The transaction was made possible through close collaboration among the Ministry of Finance, the Ministry of Railways, IRFC, DFCCIL and the World Bank.
“By mobilising long-term resources, IRFC continues to fulfil its core mandate and contribute meaningfully to India’s logistics transformation and long-term economic growth through strong indigenous financial solutions,” Dubey added. He noted that the refinancing reflects IRFC’s evolving role as a diversified infrastructure financier while remaining firmly anchored to its foundational objective of supporting railway infrastructure in India.
Since its inception in 1986, IRFC has played a key role in strengthening India’s rail infrastructure by mobilising long-term funds at competitive rates. A Navratna public sector undertaking, IRFC is expanding its mandate to include projects with forward and backward linkages to railways, such as power generation and transmission, mining, fuel and coal, warehousing, telecom, hotels and catering, metro rail, freight corridors, ports and multimodal logistics.
IRFC continues to maintain a strong asset quality profile, with a zero non-performing asset (NPA) portfolio.
DFCCIL, a wholly owned company of the Ministry of Railways, is responsible for the development, operation and maintenance of India’s dedicated freight corridors, which are critical to achieving Indian Railways’ long-term freight traffic growth and logistics efficiency goals.
