ADB to extend $750-m of long-term loan to IRFC for track-electrification project.

The Asian Development Bank (ADB) has signed an agreement to provide long-term financing amounting to $750-million — the largest single non-sovereign loan ever committed by the bank — to Indian Railway Finance Corporation (IRFC), to fund its track electrification project.

The electrification drive is part of a broad modernisation programme that will help the railways transition to electric power and reduce dependence on fossil fuels. Concurrent with the signing of the loan agreement, risk participation agreements have also been signed with private risk participants of the project, said an ADB release.

The IRFC will use the proceeds of the loan to install electric traction equipment along approximately 3,378 km of existing railway lines, which will enable the migration of passenger- and freight-traffic from diesel to electric traction. The electrification assets will be leased to the Indian Railways under a long-term lease agreement.

“This is a flagship project demonstrating ADB’s strategy of supporting key State-owned enterprises in strategic sectors,” said Diwakar Gupta, ADB’s Vice-President for Private Sector Operations and Public-Private Partnerships.

HBL