The French development agency Agence Francaise de Developpement (AFD) has approved a loan of Rs 1,527 crore as loan for the Metro rail project. An MoU would be signed between the AFD and the Central Government in February in this regard. The agreement states that the loan need not be repaid in the first five years. Meetings to discuss these norms will be held in the coming days, the officials said.
The AFD officials had visited Kochi in September and held discussions on the financial aspects. Other issues such as the land acquisition, project construction, procurement plan were also discussed. Even though there were plans to secure loan from Japan International Corporation Agency (JICA) whose interest rate is less, the mandates laid by the Japanese agency are stricter which would make it difficult for the KMRL to avail of the loan. Hence, it was decided to approach the AFD since it was easier to access the loan from the French agency.
KMRL officials said the JICA funding was not required for the first phase of the project as the Canara Bank has decided to provide loan for it. “We may only be considering the JICA loan in the second phase. The loan which will be received through the Canara Bank as well as AFD loan for the first phase of the project between Aluva and Pettah, will be sufficient for the first phase,” the officials said. A total of Rs 5,181 crore is required to implement the project. Apart from the foreign funding, the state and Central government would be paying the rest of the money.