IRFC to sign ₹20,000 crore MoU for Vadhvan Port funding, boosting India’s mega maritime project with low-cost PSU financing.
In a major boost to India’s maritime infrastructure ambitions, the Indian Railway Finance Corporation (IRFC) is set to sign a ₹20,000 crore memorandum of understanding (MoU) with Vadhvan Port Project Ltd to fund the construction of the upcoming Vadhvan Port in Maharashtra. The agreement will be inked during India Maritime Week 2025, which began on October 27 in Mumbai.
According to officials, IRFC, the financing arm of Indian Railways, has expressed willingness to provide loans at competitive rates of 7–7.2%, making it a cost-effective funding option compared to international borrowing. “If they are ready to give money at 7–7.2%, that’s the best. Instead of borrowing abroad, we can use a PSU to fund the project,” said a source close to the development. The project will require funds starting in 2027, after utilising its initial equity investments.
The ₹76,220 crore Vadhvan Port Project, a mega maritime infrastructure initiative, is designed to handle 298 million tonnes (MT) of cargo annually, including 24.5 million twenty-foot equivalent units (TEUs). Once operational, it is expected to be among the top 10 ports globally, transforming India’s cargo handling capabilities.
IRFC, a Navratna public sector enterprise, has been diversifying its lending portfolio beyond rolling stock since the Indian Railways began receiving major funding through Gross Budgetary Support (GBS) two to three years ago. The corporation is now focusing on financing ports, power plants, coal mines, and rail connectivity projects linked to the Dedicated Freight Corridor (DFC) network.
A source added that IRFC intends to offer loans at rates lower than Power Finance Corporation (PFC) and REC Ltd, making infrastructure investments more affordable. “IRFC is trying to mobilise funds as cheaply as possible and pump them into the infrastructure sector with minimal margins,” the source said.
Earlier this year, IRFC raised ₹3,000 crore from the domestic bond market at a record-low rate of 6.65% for five-year maturities. The upcoming MoU positions IRFC alongside Japan International Cooperation Agency (JICA), PFC, and REC, all of which have already expressed interest in financing the Vadhvan Port project.
With this latest development, India moves a step closer to realising its vision of world-class port infrastructure, anchoring economic growth, trade efficiency, and maritime dominance in the years ahead.
Source: ET Infra
