Indian Railway Finance Corporation (IRFC) has signed a loan agreement with Sumitomo Mitsui Banking Corporation (SMBC), GIFT City branch, for an external commercial borrowing (ECB) equivalent to $300 million in Japanese yen terms. The agreement was executed on December 2, 2025, in Gandhinagar.
This marks IRFC’s first ECB transaction in over three years. The borrowing is unsecured and is yet to be drawn.
Loan Structure and Benchmark
- Tenure: 5 years
- Benchmark: Tokyo Overnight Average Rate (TONAR)
- Nature: Pure financing arrangement with no shareholding, board rights, or control clauses
IRFC confirmed that the structure complies with standard ECB regulations and does not qualify as a related-party transaction.
Planned Use of Funds
The proceeds will be deployed toward projects supporting the railway ecosystem through forward and backward linkages, along with other internally approved infrastructure initiatives that fall under the permissible end-use norms.
The borrowing forms part of IRFC’s broader strategy to diversify into a wider range of infrastructure financing areas.
Signing Ceremony
The agreement was signed in the presence of senior officials from IRFC, including Deepa Kotnis (Executive Director – Finance), Rakhi Dua (Senior General Manager – Finance), and members of the ECB team, Nav Goel and Dhruv Taparia. Representatives from SMBC’s GIFT City branch also participated in the signing.
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