IRFC to Sign MoU for ₹20,000 Crore Funding for Vadhvan Port Project.

State-owned Indian Railway Finance Corporation Ltd (IRFC), the financing arm of Indian Railways, is set to sign a memorandum of understanding (MoU) with Vadhvan Port Project Ltd to provide up to ₹20,000 crore in funding for the construction of the upcoming Vadhvan Port in Maharashtra.

According to people familiar with the matter, IRFC has expressed its willingness to extend loans for the project at rates between 7% and 7.2%, which are competitive compared to borrowing costs from external sources. “Instead of seeking funds from private or foreign lenders, it makes sense to source financing through a PSU like IRFC at those rates,” a source said, adding that the project will require funds starting 2027, once its equity component is fully utilized.

The MoU will be formalized during the India Maritime Week, beginning October 27 in Mumbai. The deep-draft port, with a planned investment of ₹76,220 crore, is designed to handle 298 million tonnes of cargo annually, including 24.5 million twenty-foot equivalent units (TEUs).

IRFC, a Navratna PSU, has been expanding its financing portfolio beyond rolling stock after Indian Railways began securing most of its procurement funds through Gross Budgetary Support (GBS) during the past few years. The company now focuses on funding backward and forward linkages such as ports, rail lines, coal mines, and power projects connected to freight corridors.

Sources indicated that IRFC’s lending rates will likely remain below those offered by Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). “IRFC aims to mobilize funds at the lowest possible cost to make infrastructure investment more affordable through reduced financing margins,” the source added.

In May, IRFC raised ₹3,000 crore from the domestic bond market at a five-year maturity yield of 6.65%, marking one of its lowest-cost issues. Other agencies, including Japan International Cooperation Agency (JICA), PFC, and REC, have also signed MoUs with Vadhvan Port Project Ltd, expressing interest in funding the strategic infrastructure venture.