MMOPL achieves financial closure for first line of Mumbai Metro

Mumbai, Oct 5 (UNI) Mumbai Metro One Private Limited (MMOPL), a joint venture between Reliance Infrastructure, France's Veolia Transport and Mumbai Metropolitan Regional Development Authority (MMRDA), signed loan agreements to raise debts totaling to Rs 1,194 crore, and achieved the financial closure for the first line of Mumbai Metro Varsova-Andheri-Ghatkopar corridor.

MMOPL, in a uniquely structured project financing model, has raised this debt from a group of banks led by IDBI, Corporation Bank, Karur Vyasa bank, Canara Bank, Indian Bank and Oriental Bank of Commerce. IIFCL (UK) is providing the foreign currency loan for the project, a release issued here today stated.

The project being built at a cost of Rs 2,356 crore will have debt component of Rs 1,194 crore, while the equity is Rs 512 crore.

MMRDA, the concessioning authority, will provide a capital grant of Rs 650 crore.

The cost of borrowing for the rupee component, which constitutes about 75 per cent of the total debt, will be 12.25 per cent, while the foreign currency loan will be at 3.5 per cent above London Interbank Offered Rate.

The debt has been raised amidst a tight global liquidity position, based on a unique funding model, where the only recourse available to the lenders is the cash flow generated from the project, instead of the project assets.

The repayment has also been structured in a manner that gradually increases over a period of time in sync with the increasing traffic revenue generated by the project. This model of financing for a urban infrastructure project is first of its kind for most Indian banks and financial institutions.

MMOPL started work on the project in February this year and has completed awarding of all rail system contracts and most of the other major contracts much ahead of the stipulated time, the release added.

UNI GS SR RP AS1731