Decks cleared for 450 million euro loan to Lucknow Metro

HELPING HAND A team of EIB officials may arrive in the state capital soon to complete necessary formalities and paper work before signing a loan pact

LUCKNOW: The European Investment Bank (EIB) has cleared Euro 450 million loan to Lucknow Metro Rail project. This is the first loan by the European lending agency to a metro rail project in the country, according to a Lucknow Metro Rail Corporation (LMRC) official.

The project will contribute to the two main objectives of the EIB’s external mandate says an official communiqué put out by the international lending agency. First, climate change mitigation by promoting modal shift from road to rail and thereby a reduction of greenhouse gas (GHG) emissions. Second, development of social and economic infrastructure by making a key contribution to urban development, thereby improving the business environment for private sector development and facilitating access to amenities and jobs.

A team of EIB officials is expected to arrive in the state capital to complete the necessary formalities and paper work before signing of a formal loan agreement either by the December end or in the first week of January 2016.

“The money would be released in two or three tranches and would be utilised in the purchase of a fleet of about 80 metro cars,” said an official requesting anonymity.

The EIB said the project was consistent with the EU country strategy paper for India, which highlights the infrastructure gap and the need to address rising GHG emissions. The LMRC officials said they were looking forward to a financial assistance of around `3502 crore for the 23-kilometre North-South corridor under the first phase of the project.

The LMRC intended to complete the eight kilometer phase 1A of the project from Chaudhary Charan Singh Airport (CCS) to Munshi Pulia by December 2016.

“We had not approached EIB. The project report of Lucknow Metro Rail was forwarded to them by the department of economic affairs (DEA), which sends such projects to interested foreign lenders,” said an official. The lending agency okayed the financial assistance at a meeting of its board of directors, according to sources.

“The EIB Board gave the goahead in October-end but we have just received an official communication from them,” he said. Despite getting the nod of the union of ministry of urban development, the project is yet to get the approval of the Central Cabinet.

According to informed sources, LMRC managing director Kumar Keshav is understood to be in touch with officials of the ministry of urban development and the department of economic affairs to get the process expedited.

It was in the first week of August this year that the Public Investment Board (PIB) of the union finance ministry had given the green signal to the Lucknow Metro Rail project.