Japan has agreed to extend Egypt a $1.2 billion loan to fund Cairo's planned fourth underground metro line, Egypt's official MENA news agency quoted Minister of International Cooperation and Planning Fayza Aboul-Naga as saying on Monday.
Egypt will repay the loan over a 40-year period at 2 per cent interest, with a ten-year grace period. According to the loan agreement, at least 30 per cent of the scheduled repayment must come in the form of purchases of Japanese goods and services.
However, the Japan International Cooperation Agency, which has been tasked with conducting feasibility studies for the project, has yet to confirm the minister's announcement.
Aboul-Naga said she was told that the loan had been approved at a recent joint meeting of the World Bank and International Monetary Fund in Washington. The minister, who described the loan conditions as "very easy," is expected to soon put the agreement before Parliament for approval.
In late 2010, the Egyptian government submitted a request to Japan's embassy in Cairo for a long-term loan with which to finance construction of the planned fourth metro line.
Construction of Cairo’s underground metro first began in 1982 with substantial loans from the French government. A second metro line was built in the 1990s, bringing total passenger capacity to an estimated 700 million per day.
In September of last year, the Japan Bank for International Cooperation agreed to fund construction of a third line with a loan of $100 million. Currently under construction, the third line is expected to become operational by 2019.