World Bank will provide $975 million loan for building a freight-only rail line for faster and efficient movement of raw materials and goods between India's Northern and Eastern regions.
"The World Bank will finance around 1,100 km of the 1,800 Km Eastern Dedicated Freight Corridor [Ludhiana-Delhi-Mughal Sarai] in three phases," the multilateral lender said in a statement.
The loan has maturity of 22 years, with a grace period of 7 years.
It will also help develop the institutional capacity of the Dedicated Freight Corridor Corporation (DFCCIL) to build and maintain the DFC's infrastructure network.
The eastern corridor (Delhi-Kolkata) will improve services for passengers in the lower Ganges basin, one of India's most densely populated and poor areas.
It will also remove the constraints to growth in the industrial heartland of Punjab and Haryana.
The corridor will allow Indian Railways to free up the capacity and better serve the large passenger market in this densely populated region.
In the first phase of support, the World Bank's Eastern Dedicated Freight Corridor Project 1 will provide $975 million to finance the 343 Km Khurja to Kanpur section.
The DFC programme will provide India the opportunity to create one of the world's largest freight operations by adopting international technologies and approaches which can progressively be extended to other important freight routes throughout the network.
It will also enable Indian Railways to recapture market share it lost to the trucking sector, which has among the lowest road freight tariffs in the world.
