Japan offers India loan to fight Covid-19 pandemic

Tribune News Service

New Delhi, September 1

Japan and the European Union (EU) have approved big loans to India to fight Covid and develop infrastructure, respectively.

While Japan has lent to further equip hospitals, the EU bank has made its second largest lending operation outside its traditional sphere to support the building of a metro in Kanpur.

The bank is also financing the construction of the metro in Lucknow, Bhopal, Pune and Bengaluru. The total loan from EU alone for the two metros in UP is estimated at Rs 8,000 crore.

The ballpark figure for loans taken by India to battle the pandemic is over Rs 60,000 crore which is expected to rise as more tranches are being negotiated with multilateral banks.

Japanese Ambassador to India Satoshi Suzuki and Indian officials exchanged documents concerning the provision of a yen loan for response to Covid. The maximum amount that India can draw is 50 billion yen (about Rs 3,500 crore).

With its finances in acute disrepair, India has borrowed from Germany and France. Germany committed an emergency support measure of 460 million Euros (Rs 3,893 crore) to support the “One Nation One Ration Card” scheme, while France committed 200 million Euros (about Rs 1,700 crore) to boost the PM Garib Kalyan Yojana.

The loan from Japan will help equip hospitals with ICUs and infection prevention and management facilities. It is also expected to lead to the enhancement of telemedicine using digital technology in numerous villages across India. The loan has been offered at 0.01 per cent per annum for 15 years.

The European Investment Bank (EIB) has approved a Euro 650 million loan (about Rs 4,500 crore) to build a metro in Kanpur. This will be its second biggest operation outside the EU to date. The EIB will finance a 32.4-km metro line with 30 stations and the rolling stock. The EIB has so far lent over Rs 20,000 crore for connectivity projects in India.

This is the second metro rail project supported by the EIB in Uttar Pradesh.

EU bank to finance Kanpur metro project

• The European Investment Bank has approved a Euro 650 mn loan (Rs4,500 cr) to build a metro in Kanpur
• The bank is also financing the construction of the metro in Lucknow, Bhopal, Pune and Bengaluru
• Japanese Ambassador to India Satoshi Suzuki and Indian officials exchanged documents on loan provision
• The maximum amount that India can draw is 50 billion yen (Rs3,500 crore)