Modernisation of Brazil's subway system will be part-funded by a $481m loan from the Inter-American Development Bank (IDB) to expand São Paulo state's Line 5.
The extension will link the line's existing terminal station at Line Lila in Long Treze with Chácara Klabin on Line 2, saving 54 minutes to reach the centre of the city's low-income neighbourhoods in the south.
The IDB loan will be used to upgrade eight units of six cars each as well as for the design, implementation and monitoring of various train operation systems including telecommunications and electrical connection.
São Paulo will finance the construction of the new 12km section of the line and its 11 stations as well as the purchase of 26 new six-car trains to run on the extended line.
The expansion is expected to increase the line's capacity more than fivefold from the current 120,000 to 644,000 passengers when it fully opens in 2013.
The project is expected to cut fuel consumption by 50 million litres of diesel and 70 million litres of gasoline per year as well as air pollutants by 17,000t per year and CO2 emissions by 257,000t per year.