Refinancing of ₹9,821cr freight corridor debt into rupee terms to save govt ₹2,700cr and eliminate currency risks.
Indian Railway Finance Corporation, the financing branch of Indian Railways, has refinanced a ₹9,821 crore foreign currency loan previously held by Dedicated Freight Corridor Corporation of India. The original debt, sourced from the World Bank for the Eastern Dedicated Freight Corridor, has been converted into a rupee-denominated facility to save the government ₹2,700 crore in interest.
The agreement, signed on 23 December 2025, marks a transition to domestic funding for large-scale infrastructure. This shift offers several strategic advantages:
- Currency risk mitigation: Shifting to rupee-based financing removes exposure to exchange rate volatility, protecting the project from fluctuations in foreign currency markets.
- Cash flow predictability: The new structure ensures debt servicing is aligned with the corridor’s rupee-based revenue, enhancing long-term financial stability.
- Domestic maturity: The deal highlights the capability of Indian financial institutions to support long-gestation infrastructure projects.
The Eastern Dedicated Freight Corridor is a critical national asset designed to revolutionise logistics. By providing a dedicated route for goods, it decongests passenger lines and reduces transit times for industrial cargo across northern and eastern regions.
Manoj Kumar Dubey, Chairman and Managing Director of Indian Railway Finance Corporation, stated that this refinancing reflects the corporation’s commitment to improving financial efficiencies within the railway ecosystem.
SOURCE – ET INFRA
