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• Telangana government has secured INR 13,600 crore refinancing from Indian Railway Finance Corporation (IRFC) for the Hyderabad Metro Rail project.
• The refinancing will replace high-cost debt and improve the metro project’s long-term financial stability.
• The agreement was signed between IRFC, L&T Metro Rail (Hyderabad) Ltd and Hyderabad Metro Rail Limited (HMRL).
• The move comes after the Telangana government recently took complete ownership control of the Hyderabad Metro project through HMRL.
• Hyderabad Metro’s 69.2-km Phase-I network currently serves around five lakh passengers daily across three corridors.
The Telangana government has secured a INR 13,600 crore refinancing arrangement from Indian Railway Finance Corporation (IRFC) for the Hyderabad Metro Rail project, providing a major financial boost to one of India’s largest metro rail systems developed under the public-private partnership (PPP) model. Advertisement
The refinancing agreement was signed in Delhi between IRFC, L&T Metro Rail (Hyderabad) Ltd and Hyderabad Metro Rail Limited (HMRL). Officials said the funding arrangement is expected to lower the project’s existing debt burden by replacing high-interest borrowings with long-term financing at comparatively lower rates.
The refinancing package has reportedly been structured with a repayment tenure of around 20 years along with quarterly repayment schedules. The funding will primarily refinance existing liabilities, including non-convertible debentures and other loans raised for the metro project over the years.
The development comes shortly after the Telangana government completed the takeover of L&T Metro Rail (Hyderabad) Ltd through HMRL. The state government had been in discussions with Larsen & Toubro for several months regarding the transfer of the project, especially after financial stress increased following the pandemic period when metro ridership and revenues were impacted.
Telangana Chief Secretary K Ramakrishna Rao said the refinancing would help improve the long-term sustainability of the Hyderabad Metro project while supporting the government’s broader urban transport plans. He added that Hyderabad continues to witness rapid growth in the IT, commercial and residential sectors, increasing the need for stronger public transport infrastructure.
The Hyderabad Metro Rail Phase-I network covers around 69.2 km across three major corridors with 57 stations connecting key residential, business and commercial areas of the city. The network currently handles daily ridership of nearly five lakh passengers and remains among the largest metro projects implemented through the PPP model in India.
The metro project was originally developed by Larsen & Toubro after winning the concession under the PPP framework. Construction work started more than a decade ago, and the network was opened in phases beginning in 2017. Over the years, Hyderabad Metro has become an important urban transport system for the city’s growing population and office workforce.
The refinancing is also expected to support future Hyderabad Metro expansion plans. The Telangana government has already proposed Phase-II metro corridors, including airport connectivity and extensions towards fast-growing residential and peripheral areas. These expansion plans are expected to improve connectivity between Hyderabad’s IT hubs, residential clusters and upcoming development zones.
Industry observers believe IRFC’s participation in metro refinancing also signals a broader push towards financing urban infrastructure projects beyond conventional railway assets. With several Indian cities planning metro rail expansion projects, similar refinancing models could be explored for other urban transit systems facing high capital costs and long repayment cycles.
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