KfW sanctions Euro 545 million loan for Mumbai Metro Line-4 in India

Frankfurt, Germany (Urban Transport News): German development bank KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) today approved a loan of euro 545 million (roughly Rs 4,000/-) to the Government of India to fund Mumbai Metro Line-4 and Line-4A, part of the city's plans to expand its mass rapid transit systems in Mumbai.

The credit package is made up of one development loan of EUR 345 million and one promotional loans of EUR 200 million. In addition, a financing agreement of EUR 2.2 million was signed for accompanying technical support. The Financial Cooperation project, which is being implemented by the Mumbai Metropolitan Region Development Authority (MMRDA), covers system components for Mumbai’s metro line 4, as well as footpaths and cycle routes surrounding the stations to improve integration within the transport system.

The interest rates vary between 0.07% and 0.82% for different tranches - the lowest rates of interest on any loan given to any infrastructure project in India by a bilateral or multilateral funding agency.

Dr. Günther Bräunig, CEO of KfW explained:

Expanding the metro system in Mumbai will not only improve road safety and reduce the level of fine dust pollution, but it will also make a valuable contribution to climate change mitigation. Once metro line 4 has begun operations, it will help to save up to 121,000 tonnes of greenhouse gases every year.

With approximately 20 million residents, Mumbai is not only among India’s most populous cities, but it is also globally among the cities which are worst-affected by traffic jams. The existing suburban railway lines are completely overloaded, transporting up to 8 million commuters a day – a situation that often leads to accidents. At the moment, Mumbai has just one metro line, which is 11 km long.

In light of this, the plan for the next few years is to build a metro network with 14 lines and a total length of 337 km covering the entire metropolitan region. The aim of expanding the metro network is to relieve strain from commuter traffic, reduce traffic accidents and respiratory problems caused by air pollution, and contribute to climate change mitigation.

The funds from KfW will be used to cover system components, including rolling stock, an integrated ticketing system and a multimodal integration system, as well as footpaths and cycle routes surrounding the stations.

"Though it is good to take decisions to start mega transportation projects, it is more important to do financial closures and provide all support to project authorities like making available the required land etc without which projects can't be completed," said Uddhav Thackeray, chief minister of Maharashtra.

"I am happy that now lines 4 and 4A do not have any major hurdle and hope that these will be completed on time," he added.

"Energy-efficient trains are due to be provided for the 34-km-long metro line 4 and the goal is for them to be completely automated in the medium term. As well as expanding the metro network, footpaths and cycle routes are due to be expanded around the stations and the safety will be improved through additional markings, signage and video surveillance," said the official release.

Updating about the progress of civil work, RA Rajeev, commissioner MMRDA, said that the two metro lines will likely ferry 13-14 lakh people once complete. About 21% of civil work on line 4 and 6% of civil work on line 4A are now complete.

"MMRDA is also working for mitigation of climate change by executing metro projects across the Mumbai metropolitan region. Once metro lines 4 and 4A begin operations, it will help to save up to 121,000 tonnes of greenhouse gases every year," said RA Rajeev.

Mumbai Metro Line-4 from Wadala to Kasaravadavli and Line-4A from Kasaravadavli to Gaimukh will connect the island city to Thane. The project cost of the two lines will be about Rs 23,000 crore. 

The two lines will stretch over 34 km and are part of the Mumbai Metropolitan Region Development Authority's (MMRDA) plan to build a 337 km-long metro rail network. Currently, 118 km of metro lines are in various stages of construction by MMRDA, and 11 km of the network is operational.