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Indian Railway Finance Corporation Ltd (IRFC) will provide funding support of up to INR 20,000 crore for the Vadhvan Port project in Maharashtra. The memorandum of understanding (MoU) for the funding is expected to be signed during the upcoming India Maritime Week in Mumbai. The deep-draft port, with a proposed cargo handling capacity of 298 million tonnes per year and 24.5 million TEUs, is estimated to cost around INR 76,220 crore. Alongside IRFC, other lenders such as JICA, PFC and REC have also shown interest in financing the project.
Indian Railway Finance Corporation Ltd (IRFC) is set to fund up to INR 20,000 crore for the upcoming Vadhvan Port project in Maharashtra. The financing marks one of IRFC's largest commitments outside the railway sector and is part of its move to diversify into broader infrastructure lending. Advertisement
Officials indicated that the MoU between IRFC and the project's special purpose vehicle (SPV) will be signed during India Maritime Week in Mumbai. The lending terms are expected to be competitive, with IRFC reportedly willing to extend credit at an interest rate of around 7-7.2 percent. According to a senior official, borrowing from a public sector enterprise at this rate is seen as a better option compared to other lenders, whose rates are at similar or higher levels.
The Vadhvan Port, located near Dahanu in Maharashtra, is planned as a deep-draft port capable of handling 298 million tonnes of cargo annually, including 24.5 million twenty-foot equivalent units (TEUs). The total investment required for the project is about INR 76,220 crore, which includes both equity and debt components. The construction phase will be executed by the SPV, with financial support from a consortium of public and international lenders.
IRFC joins other major funding agencies such as the Japan International Cooperation Agency (JICA), Power Finance Corporation (PFC), and REC Ltd, all of which have already signed MoUs with the project developers. The inclusion of IRFC strengthens the financial base for the project and highlights the government's efforts to involve multiple institutions in large-scale port infrastructure financing.
The funding pattern will be phased, with the initial equity contribution coming from the project promoter before major disbursements begin, likely by 2027. IRFC's entry into the project reflects its growing focus on supporting infrastructure beyond railways. In recent years, the company has been expanding its portfolio to include financing for coal mines, power projects, and port connectivity lines.
The shift also follows changes in Indian Railways' funding approach, where more capital expenditure is now covered through Gross Budgetary Support (GBS) rather than borrowing from IRFC. This has prompted the finance corporation to explore other opportunities in allied sectors. Earlier this year, IRFC raised INR 3,000 crore through domestic bonds at an interest rate of just 6.65 percent one of the lowest in its borrowing history reinforcing its position as a low-cost lender in the public sector.
The Vadhvan Port project is among India's most ambitious maritime infrastructure ventures. It is expected to improve cargo handling capacity on the west coast and support international trade through efficient logistics and multimodal connectivity. Once operational, the port will handle a mix of container, bulk, and liquid cargo, significantly reducing congestion at existing western ports.
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