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Indian Railway Finance Corporation Ltd. (IRFC), the dedicated funding arm of the Indian Railways, has entered into an agreement with India Infrastructure Finance Co. Ltd. (IIFCL), a public sector enterprise under the Ministry of Finance, to bolster the financing of railway infrastructure projects.

The two companies signed a Memorandum of Understanding (MoU) on Tuesday to strengthen cooperation in financing railway infrastructure projects with forward and backward linkages to the Indian Railways.

“Through this MoU, IRFC and IIFCL plan to amplify each other’s capabilities, enabling them to jointly leverage the financing opportunities for viable infrastructure projects,” said a joint press release.

The MoU will benefit both IRFC and IIFCL as they can tap into each other’s expertise in infrastructure project financing, project due diligence, syndication, credit enhancement, and re-financing. It shall also enable both the PSUs to scale up their capabilities and explore more funding opportunities together by combining their competence and expertise, the release added.

IRFC CMD Amitabh Banerjee said that the relationship between the two premier financing institutions would play a pivotal role in providing impetus toward the development of railway infrastructure in the country. This could result in better customer experience and reduce logistics costs by facilitating state-of-the-art infrastructure.

Shares of IRFC are trading 0.2 percent higher at Rs 21.40 as of 11:30 AM. The stock is down 7 percent year-to-date.

(Edited by : Rukmani Krishna)