World Bank approves US$ 130 million São Paulo Metro loan

The World Bank has approved a US$ 130 million loan to support the Second Phase of the São Paulo Metro Line 4.

The project, which aims to help the city improve its public transport network, ease congestion and protect the environment, will link key employment and service areas of the city and reduce travel times by building a new station and 1.5 km of access tunnel.

The project loan will also help complete four stations initiated during Phase 1 (São Paulo-Morumbi, Fradique Coutinho, Oscar Freire and Higienópolis-Mackenzie), build one new station (Vila Sônia) and its access tunnel (1.5 km), build additional facilities at the Vila Sônia yard, and acquire and install the necessary systems to make these stations operational.

Line 4 is operated by a private sector consortium, which financed the trains and signaling systems under the first PPP signed in Brazil.

Once the second phase is completed in 2013, Line 4 is expected to increase Metro "ridership" by over one million passengers per day, to a total of 4.8 million. Line 4 is expected to carry some 700000 passengers by the end of 2010, when Phase 1 will be operating with all of its first six stations.

Among the current and previous operations the project builds upon are: the First Phase of the Metro Line 4 Project (US$ 304 million total loans), the Trains and Signaling Project (US$ 550 million), the Integrated Urban Transport Project (US$ 45 million) and the recently approved Metro Line 5 Project (US$ 650 million).

This is a US$ 130 million, US$ denominated IBRD flexible loan with variable spread option, commitment-linked with all the conversion options repayable in 30 years with 5 years grace period. Since the first loan in 1952, the World Bank has invested approximately US$ 4.8 billion in São Paulo (including this new loan).