HYDERABAD: The Greater Hyderabad Municipal Corporation (GHMC) is negotiating with nationalised banks to refinance around 6,500 crore in existing borrowings at lower interest rates, potentially saving the civic body more than 250 crore a year.
The loans, raised to fund major infrastructure projects including H-CITI, SRDP and SNDP, currently carry an interest rate of around 8.9%. GHMC officials are seeking to bring this down to around 7%.
GHMC Commissioner RV Karnan said several banks had expressed interest in refinancing the loans. Some have offered rates of around 7.8%, while the same nationalised bank from which GHMC had borrowed has offered around 7.4%. The civic body is negotiating for a rate closer to 7%.
GHMC’s annual debt-servicing burden is currently estimated at around Rs 2,000 crore. Officials believe refinancing at a lower rate could provide significant relief to the corporation’s finances.
The move comes as the state government focuses on restructuring municipal debt and managing existing liabilities without affecting funding for key infrastructure projects.