India Railways gets $ 500 Million Loan from ADB [Oct 2011]

The Indian Railways is getting loan upto $ 500 Million loan from the Asian Development Bank (ADB) for the improvement of rail services along some of its busiest freight and passenger transport routes.
 
The ADB Board of Directors has already approved  and  financing additional lines and the electrification of hundreds of kilometres of existing track, along with installing new signalling. They will also finance a multitranche financing facility for the Railway Sector Investment Program. ADB will also support accounting reforms to improve operational efficiency at Indian Railways.
 
“This in turn will result in direct and indirect economic opportunities for about 21 million people in program areas who will benefit from faster travel times, lower costs and improved links to markets, production centres and social service facilities,” said Hiroaki Yamaguchi, ADB Principal Transport Specialist. “This program will help deliver more energy efficient, safe, reliable, and environmentally friendly rail services along key high density routes,”
 
The investment program will target busy freight and passenger routes in the states of Chhattisgarh, Orissa, Maharashtra, Karnataka and Andhra Pradesh, including the critical ‘Golden Quadrilateral’ corridor that connects Chennai, Kolkata, Mumbai and New Delhi.
 
Funds will be released in several tranches, with an initial loan of $ 150 million from ADB’s ordinary capital resources. It has a 25-year term, with a grace period of 5 years, and annual interest set in accordance with ADB’s LIBOR-based lending facility. The Government of India will provide counterpart finance of over $ 644 million to cover the balance of the costs of the total program which is estimated at over $ 1.1 billion.
 
The Ministry of Railways will carry out the program which is due for completion by December 2018.

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