The Indian Railway Finance Corporation (IRFC)  has signed a ₹42 billion (~$420 million) term loan agreement with Damodar Valley Corporation (DVC) to finance renewable energy projects across Jharkhand and West Bengal.

The financing will support DVC’s portfolio of floating solar, ground-mounted solar, rooftop solar, and battery energy storage projects. According to IRFC, the projects will use DVC’s existing land, reservoirs, and transmission infrastructure.

IRFC, which is the funding arm of the Indian Railways, said the transaction is part of its expansion into infrastructure financing beyond its core financing activities. The company has been extending its long-term financing capabilities to sectors with links to the railway ecosystem.

The financing extends IRFC’s long-term funding capabilities to clean energy infrastructure. It also aims to provide long-term capital for renewable energy infrastructure that can support the railways’ energy requirements.

In April, IRFC disbursed a ₹10 billion (~$108.05 million) term loan to Maharashtra State Power Generation Company, which will use the funding to enhance its operational capabilities. The company has an installed power generation capacity of 13,880.55 MW.

Last March, IRFC won a bid to extend a rupee term loan of ₹75 billion (~$861 million) to NTPC Green Energy.

IRFC also partnered with Railway Energy Management Company to finance renewable energy projects awarded by the latter to supply power to the railways.

Over the last five financial years ending 2025, public sector banks, government-owned/controlled financial institutions, and foreign direct investments cumulatively invested around ₹7.16 trillion (~$79.13 billion) in India’s renewable energy sector.

According to data shared in Parliament by the Ministry for New and Renewable Energy, investments rose from ₹660 billion (~$7.29 billion) between FY 2021 to ₹2.68 trillion (~$29.6 billion) in FY 2025.

The surge in investments has been supported by multiple policy initiatives in recent years. In March last year, the Reserve Bank of India increased the lending limit for the renewable energy sector in its new guidelines for priority sector lending.