EUROPEAN INVESTMENT BANK EXTENDED EUR 500 MILLION LOAN TO BENGALURU METRO

Photo: Aniruddha Chowdhury/Mint

European Investment Bank (EIB) has approved the loan of EUR 500 million to Namma (Bengaluru) Metro, highest loan amount to support the sustainable transport project outside of Europe. The loan amount is sanctioned for the construction of 22 kms line with 18 metro stations and for the procurement of 96 metro coaches for the new line (Metro Line 6). This is second investment by EIB, after the sanction of EUR 450 million loan to Lucknow Metro. It is expected that Asian Infrastructure Investment Bank (AIIB) will also enter in the market and will co-finance project with EIB.

Bengaluru Metro system is currently the second largest metro system in India, with 42.3 kms of line and carries around 0.5 million passengers. The construction of new line will help to expand the metro network in the city. The city has good public transport system as buses carry around 5 million passengers daily. However the demand of the mobility is increasing owing to rapid urbanisation.

Metro line 6 is a key part of Phase-II of Namma Metro and will also create rail link to Bengaluru Airport. The line 6 will have both underground tunnels and elevated tracks. It is expected that the line will commence operation by 2022. 

The metro sector has attracted active interest from bi-lateral and multi-lateral agencies around the world. So far, metro systems in India has received loan of EUR 6,010 million from 4 key agencies. Currently, JICA (Japan International Cooperation Agency) is leading the investment in India. EIB is also one of world’s largest financiers for transport worldwide. Over the last five years it has provided more than EUR 70 billion for transport investment around the world.  

There are currently 9 cities in India with functional metro system. In 2017, Kochi and Lucknow metro has started the operation. 

List of Operational Metro Systems in India, 2017

(Source: Urban Transportation Market in India - Market Insight and Opportunities, Pcentra - Isreal, June 2017)

Hyderabad Metro will be launched on 28 or 30 November 2017. This is one of the largest PPP (public private partnership) project in India with a cost of US$3 billion. The construction is done by L&T Metro Limited and the line will be operated by Keolis. It is expected that more investment will come from funding agencies as more cities are opting for metro system. Ministry of Housing and Urban Affairs (MoHUA) has unveiled a new Metro Rail Policy to promote the participation of private players.

 

(Source: Urban Transportation Market in India - Market Insight and Opportunities, Pcentra - Isreal, June 2017)