MSRDC secures $2.5 bn funding commitments for Mumbai's ring road project

By Saikat Das

   

India’s Maharashtra state has obtained Rs 21,500  crore ($2.5 billion) worth of funding commitments from lenders for a road project near Mumbai, according to people familiar with the matter.

 

Maharashtra State Road Development Corporation Ltd., a unit of the state government, has obtained lenders’ commitment for credit lines to fund building the high-end road, said the people, who asked not to be identified because the information is private.  The new road, part of an ambitious infrastructure makeover of the world’s densest metropolitan region, is intended to reduce traffic congestion near Mumbai and improve road quality.

 

The Rural Electrification Corporation Ltd., National Bank for Financing Infrastructure and Development, and India Infrastructure Finance Company Ltd. are the largest lenders on the deal, said the people. They have agreed to lend Rs 10,000 crore, Rs 3,000 crore and Rs 3,000 crore respectively, they added.

 

REC confirmed it has committed Rs 10,000 crore term loan to MSRDC in response to questions from Bloomberg News. MSRDC and NaBFID didn’t reply to requests for comment.

 

Prime Minister Narendra Modi has put a spotlight on infrastructure as a tool to spur growth. The government increased its budget allocation for the agency that oversees roads and highways to Rs 2.78 trillion in fiscal year 2025, more than triple the amount five years prior, according to Crisil Ratings.

 

Disbursement of the credit facilities will happen in stages, and the road construction will start in the next financial year starting April, said the people. The project was recently seeking bidders to build the road, which is known as the “Multi-Modal Corridor.”

 

Other smaller lenders include Punjab National Bank, Bank of India, Bank of Maharashtra and UCO Bank, said the people familiar. These lenders didn’t respond to requests for comment.