Bangalore: The Bangalore Metro Rail Corporation (BMRCL) is expected to finalise a 300-million loan (Rs 2,275 crore) from the Asian Infrastructure Investment Bank (AIIB) in the next two days. The loan will have a 15-year tenure and comes with a 2.2% rate of interest.
The Beijing-headquartered bank is owned by several Asian countries and India is its second largest stakeholder. The BMRCL’s response follows AIIB’s offer of loan to fund Phase II of the Namma Metro project on reasonable terms.
The AIIB team has already had four rounds of discussions with BMRCL officials in Bengaluru. A BMRCL delegation led by managing director Pradeep Singh Kharola is in Beijing to close the deal. The final round of negotiations is scheduled for Nov 8-9.Once the terms are finalised, the Department of Economic Affairs (DEA) of the Union government is expected to sign the finance contract in about two months paving way for the flow of funds.
The Luxembourg-based European Investment Bank (EIB), which is cofinancing the project along with AIIB, has committed a loan of 500-million (Rs 3,770 crore).
The DEA and EIB signed the contract for the first tranche of 300 million last month for reach six (R6) of Metro Phase II. This apart, BMRCL has also borrowed 200 million (1,508 crore) from AfD, France. All these loans have flowed in through the DEA channel.
Phase II is being financed jointly by EIB (500 million) and AIIB (300 million). The project envisages extension of east-west and north-south lines covering a length of 72 km, including the underground length of 13.8 km. The project will have 61 stations with 12 underground. The project is implemented over a five-year period from the date of launch.
The BMRCL has estimated Phase II to cost Rs 26,000 crore. Of the project cost, 60% will come from loans, while the Union and the state governments will chip in the rest by equally sharing the project equity . Work under Phase II is progressing in full swing, Kharola said. The BMRCL, he added, will complete the first reach next year and has targeted to complete Phase II in 2020.
The work on both Kanakapura Road and Mysuru Road extensions are according to schedule and will be completed next year.
The spinoffs of the project, a DEA press release last month said, would include job opportunities, a drop in the number of vehicles on road, reduction in air pollution, faster travel and improvement in the aesthetic value of the city, among others.
Vice President M Venkaiah Naidu, at a conference on Saturday, mentioned how Bangalore Metro is pursuing innovative ways to finance its project by trying to capture the land value that are going to be benefited by the project.