Hyderabad: The Greater Hyderabad Municipal Corporation (GHMC) is negotiating with nationalised banks to refinance around ₹6,500 crore in existing loans at lower interest rates.
The move could help the civic body save more than ₹250 crore annually and reduce its debt-servicing burden.
The loans were raised to fund major infrastructure projects, including H-CITI, SRDP and SNDP. They currently carry an interest rate of around 8.9%.
GHMC officials are seeking to bring the average borrowing cost down to around 7%.
GHMC Negotiates Lower Interest Rates on ₹6,500 Crore Loans
GHMC Commissioner RV Karnan said several banks have shown interest in refinancing the corporation’s existing borrowings.
Some lenders have offered interest rates of around 7.8%, while the nationalised bank from which GHMC had originally borrowed has offered a rate of around 7.4%.
However, the civic body is negotiating further and wants to secure a rate closer to 7%.
A reduction of nearly two percentage points could significantly lower the corporation’s annual interest expenses.
GHMC Debt Burden Stands at ₹2,000 Crore a Year
The GHMC’s annual debt-servicing burden is currently estimated at around ₹2,000 crore.
Officials believe refinancing the loans at lower rates would provide substantial financial relief and create additional fiscal space for the civic body.
The savings could help GHMC manage its existing liabilities while continuing to fund essential infrastructure and development works.
The refinancing exercise comes as the Telangana government focuses on restructuring municipal debt and managing outstanding liabilities without affecting funding for major infrastructure projects.
If successful, the lower-cost refinancing could strengthen GHMC’s finances and reduce the pressure created by its existing borrowings.
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