Telangana looks to GIFT City to fund Hyderabad Metro buyout after IRFC setback

The Telangana government is seeking alternative funding sources for acquiring the Phase I of Hyderabad Metro Rail (HMR) from L&T, after the Indian Railway Finance Corporation (IRFC) loan proposal was abruptly withdrawn in May. SBI Capital Markets (SBI Caps) was instructed to identify a new funding partner swiftly. Gujarat's GIFT City has emerged as a potential financing avenue, as it enables refinancing of existing projects through foreign currency loans, which could alleviate the state government's financial burden.

However, the necessity of obtaining prior approval from the Centre before disbursement remains uncertain. Despite securing clearances from the Reserve Bank of India and providing statutory guarantees, the state government is hopeful that GIFT City can provide the required funding. While SBI Caps is expected to revaluate HMR Phase I, no progress has been made in forming a joint venture with the Centre to facilitate the expansion of Hyderabad Metro, which is estimated to cost ₹38,595 crore.