France’s AfD extends Rs1,500-cr loan to Bangalore metro project
19 Sep 2015
Agence Française de Développement (AfD) has extended a €200 million (Rs1,500 crore) sovereign loan to Bangalore Metro Rail Corporation Ltd (BMRCL), the company responsible for building and operating Bengaluru's metro rail project.
Earlier, AfD had extended a loan of €110 million for construction of the metro's first phase, a 42 km stretch, of which only 19.1km has become operational.
This is AfD's largest lending so far in India and the first borrowing by BMRCL for the metro network's second phase, a 72 km stretch to be built at an estimated cost of Rs26,000 crore.
The loan came as a shot in the arm for BMRCL as another major contributor to the first phase, Japan International Cooperation Agency (JICA), said last September that it is not likely to extend any more credit to the project due to delays in construction.
So far, the first phase has seen a cost escalation of 19 per cent to Rs13,800 crore, according to BMRCL.
Pradeep Singh Kharola, managing director, BMRCL, said the funding will be utilised to finance the metro's four extension lines in phase two.
About 55 per cent of the cost of construction in phase two will be supported by the centre and the state governments. The rest will be raised through borrowings, said Vasanth Rao, general manager (finance), BMRCL.
According to the agreement signed on Friday by Kharola and Nicolas Fornage, country director of AfD, the loan will have a 15-year tenure, with a five-year moratorium. It can be availed either in rupees or in euros.