The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of India to provide a loan of JPY199bn ($2.1bn) to finance three infrastructure projects in the country.
The loan will be used to build the Delhi-Mumbai Industrial Corridor (DMIC), a metro rail project in Chennai and a piped water project in West Bengal.
Of the total loan, JPY136bn ($1.4bn) will be used for phase two of the dedicated freight corridor (DFC) project, which will see the construction of a dedicated freight rail line between Delhi and Mumbai.
The project involves a 550km rail line between Dadri and Rewari, installation of fully automated signals and a communication system, while equipment and locomotives will be introduced to support high-capacity, rapid transportation of freight.
The dedicated freight line, called the Golden Quadrilateral, will also link Delhi with Kolkata and Chennai in the southeast.
The project will be executed by the Ministry of Railways and the Dedicated Freight Corridor Corporation of India.
JICA has extended the loan at a concessional rate of 0.20%, which should be repaid over a period of 40 years with a grace period of ten years.
JPY48.6bn ($517m) will be allocated for the construction of the Chennai Metro project to help ease overcrowding and traffic congestion on city roads.
Delhi Metro Rail Corporation (DMRC) will be responsible for providing technical support for the operation, management and maintenance of the subway.
The project will be executed by Chennai Metro Rail and the loan has been provided at a concessional interest rate of 1.40%, which is to be repaid in 30 years with a ten-year grace period.
The remaining JPY14.2bn ($151m) of the total loan will be allocated to a piped water supply project in the Purulia district of West Bengal to provide safe drinking water.
Image: JICA president Akihiko Tanaka and Indian Ambassador to Japan Deepa Gopalan Wadhwa at the signing of the agreement. Photo: courtesy of Japan International Cooperation Agency.