Bengaluru Metro’s Phase 2 secures full financial closure with KfW loan

Bengaluru Metro’s Phase 2, transiting 72 km, was initially assessed at Rs 26,405 crore in 2014 but climbed to Rs 30,695 crore in 2022 and Rs 40,614.27 crore in 2024.

Germany’s state-owned developmental bank KfW has committed to a loan of ₹3,044.54 crore (€340 million) for Bengaluru Metro’s Phase 2 project, marking the completion of its financial requirements.

The loan agreement was signed on December 13 between the Government of India and KfW.

Financial Milestone Achieved

• The Bangalore Metro Rail Corporation Limited (BMRCL) confirmed that this agreement ensures 100% financial closure for Phase 2 of the project.
• The total approved senior debt for Phase 2 amounts to ₹12,141.14 crore, with prior funding secured from international agencies such as JICA, AFD, AIIB, and EIB contributing ₹9,096.60 crore.

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Phase 2 Development

• The project spans a total of 72 km and was initially estimated to cost ₹26,405 crore in 2014. This figure was revised to ₹30,695 crore in 2022 and has now escalated to ₹40,614.27 crore in 2024 due to increased costs.
• Despite plans to complete the project by March 2021, only 34.65 km (48%) of the network has been completed so far.

Significance of the Loan

The loan from KfW ensures the external loan component is fully secured, allowing BMRCL to progress with the pending work on Phase 2, which is expected to enhance urban mobility and reduce traffic congestion in Bengaluru.

The delay in the project’s completion emphasizes the need for efficient execution and project management to meet the increasing transportation demands of the growing city.