On November 6, 2020, Frankfurt-based German state-owned development bank KfW (formerly KfW Bankengruppe) extended two loans totaling 545 Million Euros (~ INR 4, 767 crore) to the Metropolitan Region Development Authority (MMRDA) for infrastructure projects in Mumbai.
i.The package consists of a development loan of 345 million Euros and a promotional loan of 200 million Euros.
ii.The approved loan amount is the highest amount given to India including the lowest rate of interest offered by any financial institution so far.
iii.The funds will be disbursed through an agreement with the Ministry of Finance, Government of India.
i.The fund will support two key mass transit projects in Mumbai. The projects are Metro Line 4 from Wadala in Central Mumbai to Kasarvadavli in Thane, and Metro line 4A that extends to connectivity from Kasarvadavli to Gaimukh in Thane.
ii.The fully elevated transit projects will have a total length of 34.82 kms with 32 stations besides bringing north-south connectivity, linking Mumbai to Thane.
iii.The metro lines will save up to 121, 000 tonne greenhouse gases every year, and will ensure reduction in air pollution.
iv.The funds will cover system components for Mumbai’s Metro Line 4 and 4A, footpaths and cycle routes surrounding the stations to improve integration within the transport system.
Rate of Interest:
i.The rate of Interest for 345 Million Euros is 0.29% and 0.07%, while for 200 Million Euros debt the rate of interest is 0.82%.
ii.Tenure of the loans – 15 years to 20 years with a grace option of five years.
iii.Out of the approved 345 Million Euros loan, around 255 Million Euros will be used for purchasing rolling stock and on integrated ticketing systems, while 90 Million Euros will be utilised on multimodal integration systems.
Recent Related News:
i.On August 24, 2020, a quartet loan agreement was inked between the Government of India, the Government of Maharashtra, Mumbai Railway Vikas Corporation (MRVC) and the Asian Infrastructure Investment Bank (AIIB) for Mumbai Urban Transport Project-III.
About KfW Bank:
Chief Executive Officer (CEO) – Gunther Braunig
Headquarters – Frankfurt, Germany