Kochi: French funding agency, Agence Francaise de Development (AFD), has decided to provide financial assistance of Rs 1,500 crore for the Kochi Metro Rail project. A board meeting of the agency on Friday took a final call on providing the loan at an interest rate of 1.9 per cent.
A French delegation, which visited Kochi in September last to make a final appraisal of the project, was satisfied with the progress made on land acquisition, construction, the procurement plan and financial analysis.
And the agency is now expected to sign a memorandum of understanding with the Kochi Metro Rail Limited (KMRL) in February next year to cement the deal.
KMRL sources said the MoU would be signed once other modalities of the loan were finalised. With the AFD loan, Kochi Metro will have enough funds for the first phase of the project.
The KMRL, which is looking for external borrowing of Rs 2170 crore for the Rs 5537 crore Metro Rail project, opted for the French agency as it is providing financial aid on simpler terms than offered by the Japanese International Cooperation Agency (JICA), according to sources.
The Centre and the state government are expected to pump in Rs 753.73 as equity share and a nationalised bank has already offered a loan of Rs 1170 crore for the project at an interest rate of 10.8 per cent to be paid back over a period of 20 years.
