HYDERABAD

The Irrigation department is working out a comprehensive restructuring of loans borrowed for irrigation projects to make irrigation corporations, including special purpose vehicles, financially self-reliant by strengthening their financial management and reducing borrowing costs.

Minister for Irrigation N. Uttam Kumar Reddy instructed officials to prepare a detailed funding roadmap within 10 days and told them to engage experienced financial professionals to assist in debt restructuring, preparation of funding proposals and improving the corporations’ financial presentation to facilitate access to lower-cost and long-term finance.

He wanted them to work in the direction of reducing dependence on direct budgetary support while focusing on operational revenues and use it for servicing loans and interest liabilities. The meeting shortlisted a few finance models for the corporations, which included revenue from solar projects by making use of unused and suitable lands of the irrigation department.

The corporations could either establish independent power projects on their own or lease the lands for the purpose, the Minister suggested and said the revenue generated from such projects would become an assured source of income.

However, it was made clear that the revenue mechanism should not impose a burden on farmers. Officials were asked to examine the legal and regulatory implications of all the proposed revenue measures before including them in the final model.

The financial statements should accurately present the position of the corporations and provide a credible basis for raising funds. The Minister stated that some irrigation corporations were paying average interest rates of around 11% on borrowings. Restructuring those loans at lower rates could result in significant annual savings. An indicative reduction from around 11.4% to nearly 8.4% could save approximately ₹250 crore annually.

Published - July 19, 2026 07:28 pm IST