The Telangana government has secured a refinancing loan of Rs 13,600 crore through the Indian Railway Finance Corporation (IRFC), paving the way for the complete takeover of Hyderabad Metro Rail (HMRL) from L&T. The decision to transfer the metro rail project to the government was formally taken by both sides a few months ago.
Agreement Signed in Delhi
HMRL, IRFC, and L&T Metro Rail (Hyderabad) signed the agreement documents in Delhi on Monday. IRFC chairman, managing director, and chief executive officer Manoj Kumar Dubey, along with Telangana chief secretary K Ramakrishna Rao, participated in the event. HMRL managing director Sarfaraz Ahmad signed the agreement on behalf of the state government.
Loan Details and Benefits
The Rs 13,600 crore loan facility will be used to refinance debt obligations, including non-convertible debentures, commercial papers, and working capital borrowings. The move is expected to facilitate a systematic exit for existing lenders while significantly improving the project's financial stability. Structured over a 20-year term with quarterly repayments, the refinancing replaces high-interest loans with low-cost, long-term rupee financing.
According to the Telangana government, the transaction is backed by strong credit enhancement measures, including a mandatory and unconditional payment guarantee from the state government, an RBI-backed direct debit mandate, and additional state guarantees.
Chief Secretary's Statement
Ramakrishna Rao said the refinancing would provide substantial financial relief to the HMRL project by reducing its debt burden and strengthening its long-term financial sustainability. He added that the move would also support future metro expansion plans.
Hyderabad Metro Rail Overview
Hyderabad Metro Rail Phase 1, developed under a public-private partnership model, spans 69.2 km across three corridors and includes 57 stations, making it one of the country's largest metro rail projects under the PPP model. More than five lakh passengers currently use the network every day.
Expansion Plans
Officials said the refinancing would strengthen the metro project's financial capacity and accelerate expansion plans, including new corridors, improved connectivity to emerging areas, and enhanced last-mile connectivity. The chief secretary reiterated the Telangana government's commitment to building an efficient, sustainable, and people-friendly public transport system in Hyderabad. He said the city is rapidly emerging as a major economic hub and that expanding metro connectivity is essential for easing traffic congestion, supporting growth, and improving living standards.
The state government described the agreement as a key milestone in establishing a strong financial foundation for the future expansion of Hyderabad Metro and an important step towards building a sustainable and environmentally friendly public transport system.
High-Speed Rail Corridors
Ramakrishna Rao also said the inclusion of three Hyderabad corridors among the seven high-speed rail corridors announced nationwide would transform the city's connectivity infrastructure and contribute significantly to Hyderabad's emergence as a world-class metropolis, reflecting the Prime Minister's strong commitment to the state's comprehensive development.
L&T Metro Rail (Hyderabad) representative KVB Reddy, senior IRFC officials, and representatives from various government departments were also present at the event.
