Nagpur Metro: Asian Development Bank To Lend Rs 1,527 Crore For Phase Two Expansion

The Asian Development Bank on Tuesday announced it will lend Rs 1,527 crore for the Nagpur Metro Rail phase two project. The agreement will be signed between ADB and the Department of Economic Affairs as a sovereign loan, according to a government note.

The Maharashtra Metro Rail Corp. has negotiated with the ADB to finance the project in Japanese yen, equivalent to $200 million, to benefit from a lower interest rate regime in the currency.

The loan period will be 20 years with a moratorium period of five years and will be required to be repaid in 15 years.

The interest rate will be the prevailing TONAR (overnight short-term Japanese rate) plus a 0.5 margin. "As per the current rate of TONAR, the likely interest rate will be around 0.727% per annum," the note said.

The ADB and the European Investment Bank, both multilateral development finance organisations, are funding the metro rail expansion project in Maharashtra's second capital city.

The project will draw a total financing of Rs 3,586 crore.

Phase two of the Nagpur metro consists of four extensions of two corridors of phase one, totalling 43.8 km. It will connect Khapri to MIDC ESR, Automotive Square to Kanhan River, Prajapati Nagar to Transport Nagar, and Lokmanya Nagar to Hingna.

It will connect the satellite cities and the main town to benefit a population of over 10 lakh residing in these areas, according to the Nagpur metro website. The completion target is November 2027, and the project is proposed to be commissioned in six stages.

The total project cost is Rs 6,708 crore, which will be shared 50:50 by the Union and state governments, and debt will be secured from international funding agencies.

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