Telangana Secures Rs 13,600 Crore IRFC Refinancing Boost for Hyderabad Metro Expansion

Hyderabad, May 2025 : In a major step aimed at strengthening Hyderabad’s urban transport infrastructure, the Telangana government has secured a refinancing facility of up to Rs 13,600 crore from Indian Railway Finance Corporation (IRFC) for the Hyderabad Metro Rail project.

The agreement was formally signed on Monday in New Delhi between Hyderabad Metro Rail Limited (HMRL), L&T Metro Rail (Hyderabad) Limited (LTMRHL) and IRFC in the presence of IRFC Chairman and Managing Director Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.

The Telangana government described the refinancing arrangement as a significant financial and strategic boost for the metro rail network, which has become one of the key pillars of public transportation in Hyderabad.

The development comes nearly a month after the state government formally acquired Hyderabad Metro Rail Phase-I from Larsen & Toubro Limited for Rs 1,461 crore as part of efforts to stabilise and expand the metro project.

According to the agreement signed earlier, the outstanding debt of LTMRHL, which stood at Rs 13,538.53 crore as of April 30 and was earlier backed by guarantees from L&T, was required to be refinanced under a fresh arrangement supported by the Telangana government.

Officials said the refinancing support from IRFC would now be utilised to replace existing high-cost borrowings, including non-convertible debentures, commercial papers and working capital loans.

The arrangement is expected to provide a structured and smooth exit for existing lenders while significantly improving the long-term financial sustainability of the Hyderabad Metro project.

As per the agreement, the refinancing facility has been structured over a 20-year tenure with quarterly repayment obligations. By replacing expensive debt with competitively priced long-term rupee financing, the government expects to substantially reduce the financial burden on the metro project.

The refinancing package is backed by multiple safeguards, including an unconditional and irrevocable undertaking by the Telangana government for servicing all dues payable to IRFC. The arrangement also includes a state government guarantee and an RBI-backed direct debit mandate.

Spread across 69.2 kilometres and covering three major corridors with 57 stations, Hyderabad Metro Rail Phase-I is among the largest metro rail systems developed under the public-private partnership model in India.

The metro network currently handles more than five lakh passenger journeys every day and plays a critical role in easing urban congestion and supporting sustainable transportation in the city.

Officials said the refinancing support would also help accelerate the planned expansion of Hyderabad Metro into new growth corridors and emerging urban zones.

The state government is planning to improve metro connectivity to rapidly developing residential and commercial hubs while also strengthening last-mile transportation facilities across the metropolitan region.

Chief Secretary K. Ramakrishna Rao said Hyderabad has emerged as one of India’s leading economic and technology growth centres, making strong urban transport infrastructure essential for the city’s future development.

He noted that improving metro connectivity would help reduce traffic congestion, support economic activity and improve the quality of urban life for residents.

According to Rao, the refinancing support from IRFC would provide major financial relief to L&T Metro Rail (Hyderabad) Limited and place the metro project on a much stronger long-term financial footing.

He added that the arrangement would improve financial flexibility, lower borrowing costs and support the Telangana government’s larger plans for the future expansion of Hyderabad Metro.

Officials believe the refinancing deal marks an important milestone in ensuring the long-term operational and financial stability of one of India’s largest urban transit projects while also paving the way for future infrastructure growth in Hyderabad.