The French financial agency Agence Francaise de Development (AFD) has in principle agreed to enhance the funding of kochi metro to 180 million euros (amounting to Rs 1,400 crores)30 million up from the initial offer of 150 million euros. The agency’s offer of Rs 1,400 crores at 2% interest comes with tenure of 20 years and a moratorium of 9 years. The original cost of the Kochi Metro project was 5181.79 crores, but this later increased to 5537.25crores. The Central Government will make a contribution of 1002.23 crores, the Government of Kerala will contribute 1772.23 crores and 2174 crores were to be raised from external agencies as loan.
The Director Board of Kochi Metro Rail Limited entrusted MD, KMRL to find alternate funding options for the project as advised by DEA (Department of Economic Affairs). As part of it, Representatives of Agence Francaise de Development (AFD) met the KMRL team on 18th & 19th of March, 2013. The agency had detailed discussions with KMRL MD Elias George and other senior officials. They also visited the project alignment from Aluva to Petta to understand the project better. Based on the inputs received from the pre-appraisal mission team of AFD, a formal detailed- appraisal mission team visited Kochi from 25th- 27th April, 2013.
The team led by Xavier Hoang, AFD’s senior transport expert did a detailed analysis of the project and expressed satisfaction on its progress. It also held discussions regarding the funding of the project. As a follow up to this, the next appraisal mission of AFD would be visiting the city on September 16. The AFD team that will visit Kochi in September mainly intends to analyze the Resettlement and Rehabilitation Policy and the socio-environmental aspects of the Metro Rail. It is expected that the proposal would be considered by the Board of AFD slated for November 2013 and the loan agreement between KMRL and AFD would be signed on February 2014.For the remaining external borrowing for the project, KMRL is pinning its hopes on the loan from the Japan International Co-operation Agency.