French firm to lend Rs 787 cr credit to Metro

France-based Agence Française de Développement will provide funds for Phase-I of Bangalore Metro

France-based Agence Française de Développement (AFD), a public development finance institution, has signed a project financing agreement with Bangalore Metro Rail Corporation Ltd (BMRCL) for providing Euro 110 million (about Rs 787 crore) finance to Bangalore Metro project.

The French Embassy in India, AFD and the BMRCL signed a Project Financing Agreement, here on Tuesday.

The financing has been earmarked for a long-term Credit Facility Agreement between AFD and the Government of India, which was signed on February 14, 2013, in New Delhi. The funding aims to support implementation of Phase I of the Bangalore Metro Project, in partnership with the Government of Karnataka, the Asian Development Bank (ADB) and the Japanese International Cooperation Agency (JICA).

Other Indian financial institutions such as the Housing and Urban Development Corporation (Hudco) and Indian Infrastructure and Finance Company Ltd (IIFCL) are also contributing to the funding of the project.

The first phase of Bangalore Metro project consists of two lines, totalling 42.3 km and 40 stations, and was partially commissioned in October 2011. The lines will crisscross the city from North to South and East to West. All along the 40 stations, passengers will use a modern ticketing system with user-friendly signage and passenger information systems.

By end-2014, the existing system will transport 1.2 million passengers per day and, by 2021, 1.9 million passengers per day. In addition to easing traffic congestion in the city of 8.5 million inhabitants, the project will contribute to reducing pollution and greenhouse gas emissions equivalent to about 7 million tonnes of CO2 within 30 years.

This project reaffirms the resolve of the Governments of India and France to strengthen their partnership in the urban infrastructure sector, a statement from AFD said.

In April 2011, the Asian Development Bank (ADB) extended up to $250 million (Rs 1,372 crore), while HUDCO sanctioned a loan of Rs 700 crore to Namma Metro project of Bangalore in October 2011.

Both the government of India and government of Karnataka have taken 15 per cent each of equity stake in BMRCL. The total project cost of the first phase is estimated at Rs 11,609 crore. Of this, the corporation has spent Rs 8,151 crore till now. The physical progress achieved in the project has touched 66 per cent as of January-end 2013. The entire Phase-I will be completed by December 2014.