The European Investment Bank (EIB) has agreed to provide a loan of Rs33bn (€450m) to finance construction of the first metro line in the Indian city of Lucknow in Uttar Pradesh.
The agreement, which represents the EIB’s largest ever loan to India, was signed at the 13th European Union – India summit in Brussels in the presence of Indian prime minister Narendra Modi and EIB president Werner Hoyer.
Currently, the first tranche of €200m, part of the long-term EIB loan, was signed for the Lucknow Metro.
Hoyer said: "Today’s agreement represents the largest commitment of the European Investment Bank in India and the most significant support for sustainable transport investment outside Europe.
"The first metro line in Lucknow is a flagship project not only for Uttar Pradesh and India, but also for the EU Bank’s strengthened global commitment to support transformational investment."
The loan will be used for construction of the 23km-long new metro line and procurement of a fleet of new metro trains.
Once operational, the new metro is expected to increase the use of public transport from 10% to an estimated 27% in the city of three million people.
The line, which is expected to have 22 stations, 19 of which will be elevated with three underground stations, will have a maximum design speed of 80km/h and a commercial speed of 34km/h.
It is expected the initial 8.4km phase of the line will open next year with the daily ridership forecast to reach 645,000 by 2020.
The EIB also decided to open a new Regional Representation for South Asia in New Delhi later this year in order to improve co-operation with the government, financial partners and project promoters.
Hoyer added: "The European Investment Bank has supported long-term investment across India for more than 20 years that has helped to harness renewable energy, strengthened industry and reduced carbon emissions.
"The opening of a regional office of the EU Bank in the sub-continent will ensure closer ties with public and private partners across the country, where our financial strength and technical expertise can benefit crucial long-term investment in India."
Image: EIB announces a regional office during the EU – India summit. Photo: courtesy of European Investment Bank (EIB).