This first tranche loan from the ordinary capital resources of ADB has a 25-year term, including a grace period of 5 years, commitment charges of 0.15% and interest rate in accordance with ADB’s LIBOR-based lending facility.
The program will help India improve rail services along some of its busiest freight and passenger transport routes, providing double-track for about 840 kilometers of rail routes and electrifying about 640 kilometers. New signaling will also be installed. ADB will also support accounting reforms to improve operational and financial efficiency at Indian Railways.
The total cost of the Railway Sector Investment Program is US$ 1,144.6 million, out of which loan assistance from ADB is US$ 500 million (in four tranches) and GOI’s funding is US$ 644.6 million. This is the 1st tranche for a total US$ 343.4 million (ADB loan US$ 150 million + GOI share US$ 193.4 million).
The signatories to the loan were Shri Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; and Mr. Hun Kim, Country Director for India, on behalf of ADB. The project agreement was signed by Mr. Satish Agnihotri, Managing Director, Rail Vikas Nigam Limited.
Mr. Hum Kim, Country Director for India said that our goal is to get people and goods moving more quickly and easily throughout India. Better railways not only help promote environmentally sustainable growth, they build better links between states and open opportunities to more people, he said.
The Indian Railways Vision 2020 highlights the need to remove infrastructure bottlenecks, design and deliver market-driven services, provide safe and reliable operations, and build capacity.
ADB will also provide a program linked technical assistance of US$ 300,000 to promote sustainable transport modes by monitoring carbon emission reductions from shifting bulk goods from road to rail.