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The Maharashtra Government has agreed to act as guarantor for an INR 10,000 crore loan extended by Power Finance Corporation Ltd (PFCL) to fund infrastructure projects across the Mumbai Metropolitan Region (MMR). A Government Resolution issued earlier this week confirmed the cabinet’s nod to this financial arrangement for the 2024–25 fiscal. Although a new guarantee is being issued due to the previous financial year closing, it remains subject to further cabinet clearance. The Mumbai Metropolitan Region Development Authority (MMRDA), designated as the principal borrower, is responsible for monthly updates to the finance and urban development departments. Overall, the state has permitted MMRDA to borrow up to INR 60,000 crore, of which guarantees for INR 24,000 crore have already been extended.
The Maharashtra Government has decided to provide a guarantee for a fresh loan of INR 10,000 crore being sanctioned by Power Finance Corporation Ltd (PFCL) to support infrastructure development within the Mumbai Metropolitan Region (MMR), according to officials familiar with the matter. Advertisement
A Government Resolution issued by the state’s finance department earlier this week confirmed that the cabinet had approved the borrowing under a government-backed guarantee for the 2024–25 financial year. Since the previous financial year has concluded, a fresh guarantee is being processed, pending further approval from the cabinet.
Officials clarified that in the event of a repayment delay by the Mumbai Metropolitan Region Development Authority (MMRDA), the state government will not bear any penalty. The responsibility of the loan rests entirely with the MMRDA, which is expected to provide regular monthly updates to the urban development and finance departments regarding the loan’s repayment status.
The state government has granted MMRDA approval to raise loans amounting to INR 60,000 crore for existing and planned infrastructure initiatives in MMR. Out of this, the government has already extended guarantees for loans worth INR 24,000 crore.
The initiative is part of a broader strategy to fast-track mega urban infrastructure projects across Mumbai and its surrounding regions. PFCL, traditionally focused on financing the power sector, has been expanding into infrastructure financing, aligning with central government efforts to stimulate urban transformation.
The MMRDA carries the primary repayment burden, the state’s backing significantly boosts the agency's credibility with lenders and paves the way for smoother financing of large-scale projects. As Mumbai’s development demands continue to grow, such strategic financial interventions are becoming crucial for sustaining momentum in urban transformation and mobility infrastructure.
Source: PTI
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