Government of India and the Asian Development Bank (ADB) signed a $120 million loan agreement for completion of works for double-tracking and electrification of railways tracks along high-density corridors to improve operational efficiency of Indian railways.
The tranche 3 loan is part of the $500 million multi-tranche financing facility for Railway Sector Investment Program approved by the ADB Board in 2011. The loan amount will be used to complete the ongoing works commenced under earlier tranches.
Sameer Kumar Khare, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, signed the loan for the Government of India, and Mr. Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, signed on behalf of ADB.
“The project is aimed at enhancing the efficiency of the rail infrastructure through electrification, introduction of modern signaling system, and doubling rail tracks on key routes in the country. The Program will help develop an energy-efficient, safe, and reliable railway system that will result in reduced travel time along project rail routes and improved operational and financial efficiency” said Khare after signing the agreement.
“Funding for tranche 3 loan will contribute towards achieving the overall Program outputs of double-tracking about 840 kilometer of rail routes and electrification of 640 kilometer of tracks along high density corridors,” said Yokoyama. The program is also helping implement new accounting systems and provide additional safety measures including collision avoidance equipment.
The investment program is targeting busy freight and passenger routes in the states of Chhattisgarh, Odisha, Maharashtra, Karnataka and Andhra Pradesh, including the “Golden Quadrilateral” corridor that connects Chennai, Kolkata, Mumbai and New Delh. The doubling of rail sections is being implemented along Daund-Titlagarh section, the Sambalpur-Titlagarh section, the Raipur-Titlagarh Section and the Hospet-Tinaighat section while electrification is being undertaken along the 641-kilometer Pune-Wadi Guntakal section.
ADB loan has a 20-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, and a commitment charge of 0.15% per year.