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Canara Bank signed an agreement with the Kochi Metro Rail Ltd on Sunday for a loan of ₹1,170 crore to the ₹5,200-crore Kochi Metro project.
This is the largest loan offered by Canara Bank, which is Kerala’s lead bank, to a single entity in the State. RK Dubey, CMD of Canara Bank, who signed the agreement with KMRL Managing Director Elias George, said the bank was willing to support the project further.
Dubey also said Kerala could count on Canara Bank for support for its proposed monorail projects in Thiruvananthapuram and Kozhikode.
He noted that the bank had volunteered to finance the Kannur International Airport project when no other bank was inclined to do so. The loan, for a term of 19.5 years, will carry a floating interest rate of 10.80 per cent. There will be a moratorium on repayment for seven years.
External fundingThe Kochi Metro, a joint venture of the Centre and the Kerala Government, aims to find external funding of ₹2,170 crore.
Already, the French development aid agency AFD has signed an agreement with KMRL for advancing €180 million (around ₹1,500 crore). The AFD loan is for 20 years, with a five-year moratorium.
With the Canara Bank loan, the project is now on a strong financial footing. The project now has a balanced mix of external and domestic funding from two reputed funding agencies.
The 25-km metro is expected ease the traffic congestion of a booming Kochi. In the second phase of development, the metro will provide access to the Kochi international airport.
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