Indian Railway Finance Corporation (IRFC) has executed a refinancing facility of up to Rs. 1,125 crore for Bhartiya Rail Bijlee Company Limited (BRBCL), a joint venture of NTPC and the Ministry of Railways. The initiative will minimise financing costs, reinforce BRBCL’s financial position, and lower power costs for Indian Railways.
Introduction:
Indian Railway Finance Corporation (IRFC) has executed a refinancing facility of up to Rs. 1,125 crore for Bhartiya Rail Bijlee Company Limited (BRBCL), marking a significant step in strengthening the financial ecosystem that powers Indian Railways. The loan agreement was signed at BRBCL’s Nabinagar office between Shri Sunil Goel, CGM (BD), IRFC, and Shri Deepak Ranjan Dehuri, CEO, BRBCL, in the presence of senior officials from both organisations.
Strengthening the Railway Ecosystem:
Established in 1986, IRFC serves as the dedicated financing arm of the Ministry of Railways. Over the decades, it has mobilised financial resources at competitive rates to support India’s railway infrastructure. Recently accorded the prestigious ‘Navratna’ status, IRFC has expanded its mandate beyond traditional railway financing. Today, its portfolio spans across allied infrastructure including power generation, mining, freight corridors, multimodal logistics, and metro rail.
With a remarkable record of maintaining a zero-NPA portfolio, IRFC continues to stand as a reliable and resilient financial partner to the railway ecosystem. The refinancing arrangement with BRBCL further highlights this role, aligning finance with operational needs in a way that directly benefits both railways and power utilities.
BRBCL’s Role in Railway Power Supply:
Bhartiya Rail Bijlee Company Limited, incorporated in 2007, operates the 1,000 MW Nabinagar Thermal Power Project in Bihar. The plant consists of four units of 250 MW each, designed primarily to serve Indian Railways’ growing energy requirements. Under a long-term Power Purchase Agreement (PPA), 90% of the plant’s capacity is dedicated to Indian Railways, while the remaining 10% supports the Bihar State Electricity Board.
The project operates under a cost-plus tariff structure regulated by the Central Electricity Regulatory Commission (CERC), ensuring transparency and cost efficiency in power supply. By securing refinancing from IRFC, BRBCL will significantly reduce its financing costs, thereby improving its overall financial position.
Benefits for Indian Railways:
- Lower Power Costs: Reduced financing expenses will help BRBCL lower the cost of electricity supplied to Indian Railways.
- Financial Strengthening: The facility strengthens BRBCL’s balance sheet, enabling smoother operations and future project planning.
- Synergistic Gains: The initiative reflects the Ministry of Railways’ dual benefit as both an equity partner in BRBCL and as the ultimate consumer of the power generated.
This arrangement creates a win-win scenario where Indian Railways benefits from cost-effective power, while BRBCL gains enhanced financial sustainability.
A Step Towards Sustainable Railway Growth:
The collaboration underscores IRFC’s commitment to bringing synergy and cost-effectiveness within the railway ecosystem. With railways increasingly reliant on dedicated power projects to meet operational demands, such financial initiatives ensure both sustainability and affordability in the long run.
Insight:
Shri Manoj Kumar Dubey, IRFC Chairman & Managing Director, said, “IRFC is committed to providing innovative and competitive financing solutions that create a win-win for all stakeholders in the railway ecosystem. This refinancing of BRBCL demonstrates IRFC’s continued support to the Indian Railways, true to the very reason for which IRFC was set up – to provide reliable financial support to the Indian Railways.. Building on this legacy, IRFC is now extending its support to entities within the railway ecosystem, ensuring long-term synergies, cost-effectiveness, and financial sustainability for the sector.”
Conclusion:
The Rs. 1,125 crore refinancing by IRFC for BRBCL’s Nabinagar Thermal Power Project is more than just a financial arrangement—it is a strategic move to integrate cost efficiency, strengthen the power backbone of Indian Railways, and reinforce IRFC’s pivotal role as the financial catalyst for railway-linked infrastructure.
Source: IRFC – Press Release | Image Credit: IRFC
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