MoF-KfW Signs Rs.3772 Crore Loan Agreement for Nagpur Metro

Nagpur Metro Rail MOU Signing with KfWNagpur: In a major boost to dream Metro Rail Project of Nagpur, Central Government and KfW Bank of Germany on Friday signed an agreement through which the Metro project will receive Rs 3,500 crore loan from the bank. The agreement was signed by S Selvakumar, Joint Secretary, Department of Economic Affairs and Roland Siller, Director General of KfW in the presence of German Ambassador Dr Martin Ney, OSD (Urban Transport) in the Ministry of Urban Development Mukund Sinha, Managing Director of Nagpur Metro Rail Corporation Limited (NMRCL) Brijesh Dixit and others.

According to the agreement, German Government’s Development Bank KfW has provided a loan assistance of Rs 3,750 crore (Euro 500 million) for the modern and sustainable metro system for Nagpur city being executed by NMRCL. KfW Bank has agreed to provide the loan for a period of 20 years with a moratorium of five years. The amount will be disbursed periodically as per progress of the project over three years. The Rs 3750 crore loan will be utilized for building of Metro Rail coaches, route, power supply, traction and other works. A separate agreement will be signed between NMRCL and KfW Bank within seven days. The place and date will be decided soon.

The Nagpur metro is the first metro project to be financed under this partnership. The estimated total project cost is Rs 8,680 crore (Euro 1250 million). Sanctioned by the Government of India in August 2014, Nagpur Metro Project envisages two corridors i.e 19.70 km North-South section from Automotive Square to Khapri and 18.60 km long line between Prajapati Nagar and Lokmanya Nagar. Physical works commenced in May, 2015 and the whole Metro would be operational by March, 2019.

Nagpur Metro Rail MOU Signing with KfW2A team of KfW Bank had visited Nagpur in the month of June last year, and after an in-depth study, had okayed Euro 500 million loan to Nagpur Metro under ‘ODA Plus Loan’ of Department of Economic Affairs.

Speaking after the signing of agreement, S Selva Kumar said that it for the first time the ODA (Official Development Assistance) has been accepted for Nagpur Metro Rail Project. The loan is made available through speedy process adhering to the laid down rules and regulations.

Nrijesh Dixit said, “today being the first day of new financial year the loan holds importance for the project. The funds will be used judiciously and the project will be completed within the stipulated period and within the expenditure limits as well.

The funds will be used towards building two metro corridor lines, i.e. the North -South Corridor from Automotive Square to Khapri (19.7 km) and the East-West Corridor from Prajapati Nagar to Lokmanya Nagar (18.6 km).

These two corridors are divided into four main reaches. KfW would specifically consider financing Viaduct for Reaches 2 and 4, elevated stations, track, traction and telecom systems and rolling stock. The project’s physical works began in May 2015, with the award of a civil works contract for the 4.6 km at-grade section.

The metro lines will be commissioned progressively, with the southern and western links expected to be completed and operational by June 2018 and September 2018, respectively. The remaining two links will be completed and the whole Metro would be operational by December 2019.

Nagpur Metro will be the first metro rail project in India to be financed under the Indo-German partnership for ‘clean, socially inclusive and climate-friendly mobility’ for people in cities. Nagpur Metro Rail project envisages use of KfW funds towards building two metro corridor lines — North-South Corridor from Automotive Square to Khapri (19.7 km) and East West Corridor from Prajapati Nagar to Lokmanya Nagar (18.6 km). These two corridors are divided into four main reaches. KfW will specifically consider financing, rolling stock, traction, tracks, viaduct for Reaches 2 and 4 elevated stations. The work of Nagpur Metro Rail project is being done by NMRCL, which is a Special Purpose Vehicle set up jointly by Government of Maharashtra and Union Ministry of Urban Development. NMRCL has been able to tie-up for this loan, with support from the Government of Maharashtra, Union Ministry of Urban Development, and Department of Economic Affairs, Government of India. In just 10 months since June 2015, Nagpur Metro has progressed speedily to get funds approved from KfW for its project, the official statement added after signing of agreement.

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