The European Investment Bank (EIB) has signed a €500m agreement with Paris in France to finance part of its ongoing T3 tramway extension.

Work involves extending the tramway by 14.5km from Porte d’Ivry to Porte de la Chapelle, including the construction of 26 new stations.

The circular tramway is being built to complement the radial underground railway system in a bid to improve the popularity of public transport, reduce car use and contribute to the renewal of outlying roads and districts.

The tramway extension project is the result of a partnership between the City of Paris, the Île de France Region, Syndicat des Transports d’Île de France and Régie Autonome des Transports de Paris.

Two thirds of the project’s cost will be undertaken by the city of Paris and the Paris Department of Transport and the remainder by the city of Paris.

The project started in early 2009 and is expected to finish by the end of 2012.