The Asian Development Bank (ADB) has approved a $750m loan to Indian Railway Finance Corporation (IRFC) to carry out electrification works on the rail lines.
IRFC operates as a wholly owned finance arm of the Indian Railway, which has decided to electrify 28,000km of track in the next three financial years with an investment of $6bn to $7bn, reported Business Standard.
Nearly 7,000km of rail lines will be electrified between 2019 to 2020, while the remaining 10,500km will be electrified by 2022.
The ADB loan, which can be repaid over a period of 20 years, will be invested for electrifying approximately 3,378km of rail lines, including a minimum of 16 sub-projects in 13 states across India.
A government official told the publication: “In a week we are expected to sign a final deal with the ADB for a non-sovereign project finance loan for the on-going electrification process. Based on the ongoing talks, the interest rates are likely to be 1.25 basis points (bps) higher than the acquiring rate of the ADB.”
The ADB and Indian Railways signed a loan agreement in March 2018 for availing the third instalment of $120m, as part of a multi-portion loan of $500m sanctioned for developing five projects.
The loan was sanctioned for projects, including Sambalpur-Titlagarh Doubling (182km), Raipur-Titlagarh Doubling (203km), Daund-Gulbarga Doubling (224km), Hospet-Tinaighat Doubling (201km) and Pune-Wadi Guntakal Electrification (641km).
The government official added: “The current loan of $750m will be used for new electrification projects only. We have written to the Election Commission for clearance.”
The Ministry of Railways has selected its agencies such as the Central Organisation for Railway Electrification (CORE), Rail Vikas Nigam, and railways zonal offices, to complete the electrification of the rail lines.
It is estimated that ADB-funded electrification projects in India will create approximately 4,500 additional jobs per annum.