Indian Railway Finance Corporation Limited (IRFC) has signed a ₹4,200 crore term loan agreement with Damodar Valley Corporation (DVC) to finance renewable energy projects across Jharkhand and West Bengal. The September 28 agreement expands IRFC's infrastructure financing activity into a portfolio combining solar generation and battery energy storage.
The financing will cover floating solar, ground-mounted solar and rooftop solar projects along with Battery Energy Storage System (BESS) facilities. A distinctive feature of the program is DVC's plan to use its existing land, reservoirs and transmission infrastructure, allowing renewable generation and storage projects to be developed around assets already operated by the power utility.
The inclusion of floating solar gives the financing a specific link to DVC's reservoir network. Alongside conventional ground-mounted and rooftop installations, reservoir-based solar can use water surfaces without requiring additional land for the solar array itself. The BESS component adds a dispatchable storage layer to the portfolio, although the financing announcement does not disclose the individual project capacities, storage duration or technology to be deployed.
The transaction is also significant for IRFC's evolving business model. The company is a Navratna Central Public Sector Enterprise under the Ministry of Railways and has traditionally served as the dedicated market borrowing arm for Indian Railways. Its current financing portfolio is expanding into sectors including renewable energy, power, metro rail, logistics and other infrastructure with links to the broader railway ecosystem.
IRFC Chairman and Managing Director Manoj Kumar Dubey said the DVC financing reflects what the company describes as its "IRFC 2.0" approach, involving diversification while retaining links with the railway ecosystem. The company also said the clean energy infrastructure financed through the transaction can support the Railways' growing energy requirements and its target of achieving net-zero carbon emissions by 2030.
The DVC agreement follows IRFC's earlier expansion into renewable energy financing. Its FY2024-25 annual report disclosed an agreement to finance ₹5,000 crore for NTPC Renewable Energy Limited, whose portfolio includes a power purchase agreement with the Ministry of Railways for green power supply. IRFC has also financed or pursued funding for other power-sector infrastructure as it broadens its lending activities beyond conventional railway assets.
For DVC, the financing provides long-term capital for a mixed renewable and storage portfolio rather than a single generation technology. The combination of reservoir-based solar, land-based solar, rooftop systems and BESS gives the utility several project configurations while allowing common transmission infrastructure to be used across the portfolio. The individual project pipeline, implementation schedule and commissioning dates were not disclosed in the announcement.
The transaction therefore connects three infrastructure requirements: renewable electricity generation, energy storage and grid infrastructure. By financing projects that can use DVC's existing land, reservoirs and transmission network, IRFC is extending its long-term lending model into clean energy while DVC develops additional renewable generation and storage capacity in its operating regions.