Govt signs 140 mn euro loan agreement with KfW for energy sector reforms

The Government of India (GoI) and the German development bank KfW on Thursday signed agreements for a Euro 140 million reduced interest loan and Euro 2 million grant for an energy reform programme in Madhya Pradesh.

The project will contribute to a more stable, secure and climate and environmentally friendly energy supply in India by upgrading and strengthening distribution networks in Madhya Pradesh, the finance ministry said in a statement.

It will contribute to an effective, technically and economically efficient as well as socially and ecologically sustainable energy supply, it added.

The project comprises two components -- implementation of smart meters and Advanced Metering Infrastructure (AMI); and separation of agriculture and non-agriculture feeders.

Meanwhile, another statement said a loan agreement has been signed between GoI and European Investment Bank (EIB) for first tranche loan of Euro 250 million for the Agra Metro Rail project.

The agreement was signed on Wednesday.

Prime Minister Narendra Modi had inaugurated construction work of the Agra Metro project in Agra, Uttar Pradesh, last year through video conference.

EIB has approved a total loan of Euro 450 million for the project.

The financing from EIB will help to fund construction of 29.4 km metro corridor, comprising Corridor-1 from Sikandara to Taj East Gate (14 km) and Corridor-2 from Agra Cantt to Kalindi Vihar (15.4 km).

Further, the project will enhance economic productivity of the city and catalyse job creation, it added.