The Asian Development Bank (ADB) has signed an agreement to extend $250m to Bangalore Metro Rail (BMRCL) to partly-finance a metro rail project in the Indian city.
The Bangalore metro project includes two corridors with a track length of 42.3km and is designed to carry 40,000 passengers per day which is expected to increase to two million passenger trips per day by 2021.
In October last year, BMRCL had started operations on 18.1km of the east-west corridor between Baiyappanahalli and M G Road in Bangalore, India.
The metro project also comprises a 24.2km north-south corridor, 39 stations, automatic fare collection, centralised train control system, electrical works, signalling and telecommunications system, and 168 train cars.
ADB country director for India Hun Kim said: "This is the first ADB loan to the urban transport sector without recourse to sovereign guarantees."
About 8.82km of the planned metro rail project near City Railway Station, Vidhana Soudha, Majestic, and City Market will be underground sections, and the rest will be elevated.
The entire project is estimated to cost $2.7bn and be completed in 2013 which is being implemented by BMRCL, a special purpose vehicle, jointly owned by the Indian Government and Karnataka state.
After completion, the project will benefit six million residents of Bangalore by offering a safer, faster, fuel-saving public transport system leading to a reduction in road congestion.
Apart from ADB’s 18-year loan, the Indian Government and state governments will contribute subordinated debt and equity to the project.
Bangalore Metro will be the first major metro rail systems in India to use a leveraged finance model combining government funds with commercial loans.
The project will also be part-funded by an official development assistance loan from the Japan International Cooperation Agency as well as a commercial loan.