KfW to give €500 mn for Bengaluru Metro expansion
Germany’s state-owned investment and development bank's India director Wolf Muth said that the funding would be used to construct new lines for the Bengaluru Metro, also called Namma Metro.
KfW, Germany’s state-owned investment and development bank, is set to sign an agreement to provide €500 million (around ₹4,500 crore) in financial assistance for the expansion of the Bengaluru Metro. The funding, which includes loan and grants, will help the metro’s expansion plans as well as provide technical expertise to the metro project.
KfW, which is looking to expand its funding for green energy and sustainable mobility projects in India, is also financing metro projects in Mumbai and Nagpur among other cities.
KfW’s India director Wolf Muth confirmed the development in an interview with Mint. Muth said that the funding would be used to construct new lines for the Bengaluru Metro, also called Namma Metro.
“We bring in a lot of capacity and expertise with respect to environmental and social aspects. So, we have high standards and these are things which have to be adapted in the project execution,” said Muth.
Queries mailed to the ministry of housing and urban affairs and the BMRCL, a special purpose vehicle tasked with implementing the metro project, went unanswered.
KfW, which has been active in India since 1958, has also provided funds to other metro projects in the country. In 2016, it provided a €500 million loan to the Indian government for the construction of a “modern and sustainable metro system” in Nagpur.
“Together with the building of two metro lines covering a combined length of 38 km, the KfW promotional funds will be used for flyovers, stations, rail, traction and telecommunication systems as well as rolling stock,” the bank announced in a press release at the time.
Muth indicated that a similar process will be followed in the case of the Bengaluru Metro loan.
KfW also provided funding for the expansion of the Mumbai metro in 2020 through the provision of a €545 million loan. “The credit package is made up of one development loan of €345 million and one promotional loan of €200 million. In addition, a financing agreement of €2.2 million was signed for accompanying technical support,” KfW explained in a statement.
The funding for an expansion of the city’s metro lines aimed to alleviate the intense pressure on Mumbai’s cities and suburban railway systems.
Funding for sustainable and pollution-reducing metro projects squarely with the new Green and Sustainable Development Partnership (GSDP) unveiled by India and Germany in 2022.
Germany committed to providing at least €10 billion in assistance to India for its green and sustainable development ambitions with KfW providing an estimated €1 billion annually for funding in India. The bank is also expected to provide funding for PM e-Bus Sewa scheme, which plans to put 10,000 electric buses on the streets of nearly 170 Indian cities. The scheme is expected to cost ₹57,613 crore, of which ₹20,000 crore will be provided by the central government.
Muth confirmed that conversations between KfW and the Indian government on the matter are ongoing.
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First Published:12 Dec 2023, 03:19 PM IST
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