The German Bank’s pact comes close on the heels of World Bank’s decision to allow a $250-million development policy loan for the ‘Rebuild Kerala Initiative’.
German bank KfW has offered a $200-million soft loan for rebuilding the Kerala roads damaged in the devastating floods of 2018. Representatives of the bank have inked an agreement to this effect here this week. This pact would get the Rs 1,800-crore reconstruction of 31 roads in Kerala going by May 2020, the state government said in a release.
The German Bank’s pact comes close on the heels of World Bank’s decision to allow a $250-million development policy loan for the ‘Rebuild Kerala Initiative’. KfW is also providing a Rs 25-crore grant for institutional capacity building in development.
Carla Berke, team leader, India mission, KfW Bank; Jan T Albers, executive manager, Frankfurt Urban Development Project; Kiran Avadhanula, senior sector specialist, Delhi Urban Development; Tom Jose, chief secretary ( Kerala), and RK Singh (principal secretary – tourism, Kerala), were involved in the discussions prior to the signing of the agreement.
This detailing pact is a follow-up on the loan agreement signed between the Central government and KfW on October 30 after the clearance from the ministry of economic affairs. Interest rates on the loan will be 1-1.5% above Libor (London Inter-bank Offered Rate), officials of ‘Rebuild Kerala Initiative’ told FE. KfW’s loan is to come in two tranches.
Kerala State Transport Project (KSTP), the implementing agency, has been asked to complete the road reconstruction project within five years. The 31 roads together would involve 800 km in length. Contrary to World Bank assistance, the payments of KfW are bill-based. This means KfW has assigned its consultant KSTP to monitor the projects on their behalf.