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KfW IPEX-Bank provides financing with Hermes cover for metro in Gurugram, India

News from 2018-06-07 / KfW IPEX-Bank

It is a novelty in India's financing market: For the first time, a loan has been granted in India for the benefit of a metro line expansion with backing from an export credit agency (ECA). In this case, the metro is being executed and successfully implemented by a private developer. KfW IPEX-Bank is providing the financing to the tune of EUR 23.4 million and is serving as Hermes agent. The loan will be utilised towards the Rapid Metro South Extension Project, where a large German manufacturer has supplied rolling stock, the signalling and the power system. KfW IPEX-Bank has also included a fixed-rate loan based on the CIRR (Commercial Interest Reference Rate) with a tenor of approx. 13 years at attractive terms and conditions with the aim of supporting German exports. The German exporter supplies various technical components for the expansion of the metro line in Delhi and the National Capital Region (NCR). The borrower is IL&FS Transportation Networks Ltd (ITNL). IL&FS Financial Services Limited (IFIN) acted as the Advisor cum Arranger to ITNL for the transaction. The overall investment volume adds up to INR 2.400 crores (approx. EUR 300 million).

Luis-Miguel Gutierrez, Chief Representative of KfW IPEX-Bank in India, is particularly pleased about the closing: "This is the first ECA financing ever done to support an Indian metro project. In India, soft loans by Development Finance Institutions (DFIs) dominate in this segment. With our financing for the benefit of the Rapid Metro line expansion in Gurugram we have introduced a completely new financing model in the Indian market."

Ramesh C. Bawa, Managing Director & Chief Executive Officer, IL&FS Financial Services Limited, said: “Developing world-class urban infrastructure will help India progress faster in achieving its economic goals. The Gurgaon Rapid Metro project has exemplified how Public-Private-Partnerships also have an ability to attract international funding.”

The Rapid Metro line is the first privately built and operated metro line in all of India.

Metro expansion in 50-million conurbation Delhi

An extension of the dual-track metro line by approximately seven kilometres and five stations connected the IT industrial park in Gurugram (also known as Cyber City) to Delhi's metro system and the Southern part of Gurugram. Since the metro in Gurugram (formerly Gurgaon) runs as an elevated metro throughout, it does not require any extra land in the densely populated region. Between 2011 and 2017 the city's population increased from 1.5 million to 2.6 million inhabitants. Gurugram has grown into an industrial and financial centre and, with per-capita income that ranks 3rd in the country, it is one of India's most prosperous cities. Gurugram is located in the NCR, which also encompasses Delhi, and boasts a population of around 50 million people. The urbanisation rate of this region exceeds 60 per cent, so that expanding public transport is a key task of city planners. The financing from KfW IPEX-Bank helps support the metro expansion while also protecting the climate and the environment in a highly populated region.

The new metro section has been in operation since March 2017 and is running virtually snag free since commencement of its operation. A further extension of the metro line is currently under consideration.



Antje Schlagenhaufer


+49 69 74 31-4009


+49 69 74 31-8536



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