The International Bank for Reconstruction and Development (IBRD) or World Bank has approved $650m in the third phase of loans to support the construction of India’s freight-only rail line Eastern Dedicated Freight Corridor (EDFC).
The project will make way for faster and more efficient movement of goods between the northern and eastern parts of the country.
The World Bank loan has a seven-year grace period and a maturity of 22 years.
In the first two phases, the bank respectively sanctioned $975m and $1.1bn, both with maturity periods of 22 years with a seven-year grace period.
The World Bank has fully approved three loans to support the construction of three sections of EDFC totalling 1,146km.
The third phase loan will help build the 401km Ludhiana-Khurja section in Uttar Pradesh, Haryana and Punjab, which is part of the 1,840km EDFC between Ludhiana to Kolkata.
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By GlobalDataThe World Bank said that the project will help increase the capacity of these freight-only lines by raising the axle-load limit from 22.9t to 25t and allow speeds of up to 100km/h.
Additionally, the project will also help develop the institutional capacity of the Dedicated Freight Corridor Corporation of India (DFCCIL) to build and maintain the DFC infrastructure network.
World Bank country director in India Onno Ruhl said: "Implementing the Dedicated Freight Corridor programme will provide India the opportunity to create one of the world’s largest freight operations.
"The corridor, which will pass through states like Uttar Pradesh and Bihar, will benefit from the new rail infrastructure, bringing jobs and much-needed development to some of India’s poorest regions.
"Moving freight from road to rail will reduce the carbon footprint of freight by 2.25 times."
Approved in May 2011, the first loan of $975m was used for the 343km Khurja-Kanpur section in the EDFC programme and is already under implementation.
In last April, the World Bank has approved the second loan of $1.1bn for the second phase, which covers 402km from Kanpur to Mughal Sarai.
The EDFC is planned to be built on two main routes of the western and the eastern corridors, which are expected to help increase railway transportation capacity through high-capacity, higher speed dedicated freight corridors along the Golden Quadrilateral highway network connecting Delhi, Mumbai, Chennai and Kolkata.