Japan Lends Rs 61 bn For Namma Metro Phase Three
RAILWAYS & METRO RAIL

Japan Lends Rs 61 bn For Namma Metro Phase Three

The Japan International Cooperation Agency (JICA) will lend Rs 6,100 crore (Rs 61 bn) as Official Development Assistance for Namma Metro Phase Three, according to a government statement. The loan agreement was signed in New Delhi by senior officials from the Department of Economic Affairs and JICA. The funding aims to support remaining civil works on the 44.5 kilometre project. The assistance is intended to complement domestic funding, support project continuity and strengthen oversight mechanisms.

The loan carries a repayment period of 30 years including a 10 year grace period and applies an interest rate linked to the Tokyo Term Risk Free Rate plus 80 basis points for the project. Consulting services will attract an interest charge of 0.80 per cent and procurement will be conducted under general untied conditions. The terms are intended to provide long term fiscal space while ensuring procurement flexibility. TORF operates as a yen benchmark and links the loan to market conditions and broader developments.

The Bengaluru Metro Rail Corporation Limited (BMRCL) will use the financing to float civil tenders for the outstanding packages and to accelerate construction where possible. Project planners have revised the completion deadline to April 2032 to reflect revised schedules and procurement timelines. Authorities expect the loan to bridge funding gaps and enable continuity of work across remaining corridors. BMRCL has been advised to sequence tenders to maintain steady workflow across zones.

Officials noted that adherence to contractual timelines and transparent procurement will be essential to realise benefits for commuters and to contain cost escalation. The arrangement is expected to bolster confidence among contractors and suppliers engaged in the metro expansion. Project managers will continue to coordinate with central and state agencies to monitor progress and spending. The focus on transparent procurement aims to mitigate cost escalation risks and protect taxpayers.

The Japan International Cooperation Agency (JICA) will lend Rs 6,100 crore (Rs 61 bn) as Official Development Assistance for Namma Metro Phase Three, according to a government statement. The loan agreement was signed in New Delhi by senior officials from the Department of Economic Affairs and JICA. The funding aims to support remaining civil works on the 44.5 kilometre project. The assistance is intended to complement domestic funding, support project continuity and strengthen oversight mechanisms. The loan carries a repayment period of 30 years including a 10 year grace period and applies an interest rate linked to the Tokyo Term Risk Free Rate plus 80 basis points for the project. Consulting services will attract an interest charge of 0.80 per cent and procurement will be conducted under general untied conditions. The terms are intended to provide long term fiscal space while ensuring procurement flexibility. TORF operates as a yen benchmark and links the loan to market conditions and broader developments. The Bengaluru Metro Rail Corporation Limited (BMRCL) will use the financing to float civil tenders for the outstanding packages and to accelerate construction where possible. Project planners have revised the completion deadline to April 2032 to reflect revised schedules and procurement timelines. Authorities expect the loan to bridge funding gaps and enable continuity of work across remaining corridors. BMRCL has been advised to sequence tenders to maintain steady workflow across zones. Officials noted that adherence to contractual timelines and transparent procurement will be essential to realise benefits for commuters and to contain cost escalation. The arrangement is expected to bolster confidence among contractors and suppliers engaged in the metro expansion. Project managers will continue to coordinate with central and state agencies to monitor progress and spending. The focus on transparent procurement aims to mitigate cost escalation risks and protect taxpayers.

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