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Mumbai:  The Japan International Cooperation Agency or JICA, the Japenese government’s official development assistance (ODA) arm, has extended a loan of up to Rs 4700 crore (71 Billion yen) for the construction of Mumbai Metro Line III project – the city’s first underground metro.

The funds would be for the construction of 33.5 km of Mumbai Metro’s Line 3. The loan would also be used to finance construction of the rail line, of subways, for rolling stock procurement and consulting services.

This line will connect the city’s financial centre and residential areas and about 16.99 lakh commuters are expected to use this by year 2031. Mumbai suffers from serious traffic congestion with the average speed on major city roads being less than 15 kilometers per hour.

“Providing of loan by JICA to this project would go a long way in addressing the major problem of urban congestion in the city of Mumbai,” said Shinya Ejima, chief representative of JICA in India.

The loan carries a concessional interest rate of 1.40% to be repaid in 30 years with another 10 year of grace period. The project, which is being executed by the Mumbai Metro Rail Corporation, is expected to be ready in 2019.

Project: Mumbai Metro Line III Project Amount (in Rs crore): 4700 Annual Rate of Interest for Project: 1.4% Repayment Period: 30 Years Grace Period: 10 Years

The agreement was signed today between Rajesh Khullar, joint secretary at the Department of Economic Affairs and Shinya Ejima, chief representative of JICA in India.

India is the largest recipient of JICA’s loans and the agency extended about Rs 24,000 crore in financial assistance to India in the financial year 2012.