Life Insurance Corporation (LIC) will hand over a cheque of Rs 2,000 crore to Indian Railway Finance Corporation (IRFC), the first tranche of its financial assistance, tomorrow for investment in capacity augmentation projects.
Railways had signed an MoU with LIC in March this year for financial assistance of Rs 1.5 lakh crore over the next five years for implementing railway projects.
IRFC will issue bonds to be subscribed by Life Insurance Corporation for the purpose, said a senior railway ministry official.
Though the financial assistance is available from the current fiscal, there would be a five-year moratorium on interest and loan repayment.
The official said that Rs 2,000 crore Life Insurance Corporation fund will be utilised for laying new lines to decongest busiest rail corridors.
Railway Minister Suresh Prabhu will be the chief guest at the function to mark the handing over of the first cheque of Rs 2,000 crore by Life Insurance Corporation to IRFC towards financial assistance to Railways as per the MoU.