The Indian Kochi Metro Rail Limited (KMRL) has signed an agreement with French financial agency, Agence Française de Développement (AFD), for a long-term loan for the Kochi Metro Phase-1 project.

The agreement was signed by AFD CEO Anne Paugam and KMRL managing director Elias George in the presence of the state minister for power and railways Aryadan Mohammed and the French Consul Philippe Janvier – Kamiyana.

The €180m long-term direct sovereign loan will used to execute the 25km elevated north-south in Kochi, between Aluva and Petta with 22 stations.

"AFD has come forward to fund and assist us in implementing this dream project."

Under the agreement, the first installment of €20m will be given to the KMRL by January 2015.

The loan amount should be repaid in 25 years, including a five-year moratorium period.

The funding is also expected to bolster the institutional framework of the Greater Kochi urban transport sector to integrate all types of transport in line with the development of the city.

Mr George said: "We are very happy that AFD has come forward to fund and assist us in implementing this dream project of Kerala.

"Apart from providing funding, the AFD will also be assisting us in improving the quality and service of all urban transportation systems in the city."

The Indian company has invited tenders for 25 standard-gauge cars in October 2013 for INR51.7bn ($830.9m).