The New Zealand Government has announced a NZD$500m loan to state-owned rail operator KiwiRail to buy electric trains for Auckland’s metro rail system.

The procurement process is expected to begin early next year and the first electric train will enter service in 2013.

The new trains will be used on the city’s railway, which will be electrified as part of its ongoing modernisation.

The upgrade, which includes double tracking, is expected to increase the frequency of trains at peak hours and help meet growing passenger demand.

The new loan brings the government’s investment in Auckland’s metro rail system to NZD$1.6bn.