IRFC Secures JPY Equivalent USD 400 Million ECB Loan

Indian Railway Finance Corporation Ltd (IRFC) has entered into a loan agreement to raise a JPY equivalent USD 400 million External Commercial Borrowing (ECB). The agreement was signed with a consortium comprising Sumitomo Mitsui Banking Corporation and MUFG Bank Ltd, both operating through their GIFT City branches. This transaction represents IRFC’s second ECB for the fiscal year 2025-26, following an earlier ECB of JPY equivalent USD 300 million secured in December 2025.

The financial terms of the agreement specify a loan amount of JPY equivalent USD 400 million. The loan is structured as an unsecured facility with a five-year tenor. It is benchmarked to the Overnight TONAR (Tokyo Overnight Average Rate). The agreement was executed on February 25, 2026. There are no special rights or shareholding arrangements associated with this agreement, and it does not fall under related party transactions.

The scope of the ECB involves utilizing the proceeds to finance projects with forward or backward linkages to the railway sector. The funds may also be allocated to other projects approved by IRFC in compliance with the ECB Guidelines. The agreement does not include any security provisions, as it is an unsecured loan.

The loan agreement was signed by Mr. Nav Goel, General Manager (Finance) of IRFC, and representatives from the lending banks, Mr. Manoj Kaushik, Executive Director of SMBC, and Ms. Parul Shah, Head IBU of MUFG. The ECB is intended to support IRFC’s ongoing efforts to mobilize resources through diversified avenues at competitive rates, thereby facilitating the expansion and modernization of railway infrastructure.

The timeline for the loan agreement commenced with its execution on February 25, 2026. The funds are expected to be utilized over the five-year term of the loan, with the specific projects and timelines for fund allocation to be determined in accordance with IRFC’s strategic objectives and compliance with ECB Guidelines.

Sumitomo Mitsui Banking Corporation and MUFG Bank Ltd are prominent financial institutions with a focus on providing comprehensive banking services, including corporate and investment banking. Their involvement in this transaction underscores their commitment to supporting infrastructure development projects.

Indian Railway Finance Corporation Ltd is a key financial arm of the Indian Railways, responsible for raising funds to support the expansion and modernization of railway infrastructure. The company focuses on leveraging diverse financial instruments to secure competitive funding, aligning with its strategic objective of enhancing the railway sector’s capacity and efficiency.