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Traffic infrastructure

Growing metropolises and areas with high population density urgently need transport infrastructure that takes account of their size and meets their mobility needs. Financing investments in public rail and road projects is essential for expanding the capacity of transport connections and improving living conditions in the given region.

Financing case metro line 4 in São Paulo: Expanding the network for the city's 15 million inhabitants

One example of our commitment in the area of public transport infrastructure is our involvement in the financing of metro line 4 in São Paulo, Brazil. KfW IPEX-Bank has provided USD 37 million in project financing for the acquisition of rolling stock as well as for the purchase and installation of control and communication systems. The financing also covers the operation and maintenance of the new 12.9-kilometre-long metro line. The first stations between Faria Lima and Paulista were opened in May 2010, and the rest of the line has been in operation since October 2011.

The project is being carried out in two phases: In the first phase, 14 trains, including communication and signal equipment for six stations, were built and operated. In the second construction phase, another 15 trains, including equipment for an additional five stations, will be put into operation.

The project is based on a 30-year agreement as part of a public-private concession partnership project. This represents one of the first PPP projects falling under Brazil’s new federal regulatory framework. The infrastructure is being built separately by the provincial government.

Complex involvement of IDB and other consortia

Several commercial banks and the multilateral Inter-American Development Bank (IDB) are involved in the external financing of metro line 4 in the amount of approx. USD 310 million. The IDB is one of the key creditors of the São Paulo regional government and the main project lender. The financing is structured as a so-called "A/B" loan, in which the IDB funds the first phase of the project with an "A loan" in the amount of USD 69 million. The “B loan” in the amount of USD 240 million in phase I represents a sort of risk sub-participation for the IDB. It was structured as a consortium financing, to which KfW IPEX-Bank has contributed USD 37 million.

Support of European exports

One of the core tasks of KfW IPEX-Bank is to support German and European export financing. With this project financing, we are also supporting European goods and services: For example, the communication and signal equipment for the metro line is being supplied by the German exporter Siemens.

The pulsing arteries of a global city

With approx. 15 million inhabitants, São Paulo is one of the most congested cities in the world and its metro one of the planet's most-used public transport systems. The expansion of the network will thus serve to increase the capacity of public transport in the metropolis. Metro line 4 connects large business districts (such as the Historic Centre, Avenida Paulista and Faria Lima) with residential areas (such as Morumbi and Butanta). Furthermore, the line connects the existing metro system with key rail networks and five bus stations. This will allow daily commuter traffic to be shifted from roads to rails – easing transport for the city’s millions of inhabitants and also reducing harmful emissions.

Metro line 4 in São Paulo financing details at a glance

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Project profile
  • Exports: Hyundai Rotem, Siemens
  • Project company: Concessionária da Linha 4 do Metro de São Paulo S.A. (ViaQuatro)
  • Debt capital financing: approx. USD 310 million
  • Type of financing: project financing
  • Tenor: 12 years
Contribution of KfW IPEX-Bank
  • Loan: USD 37 million
  • Present locally with an office in São Paulo
  • Many years' experience in the area of infrastructure