The Philippines on Friday sealed a 17.4-billion Japanese yen (around $130 million) supplemental loan agreement with the Japan International Cooperation Agency (JICA) for the rehabilitation of the Metro Rail Transit Line 3 (MRT-3).
The Department of Finance (DOF) said the loan agreement was inked on May 26 at its main office in Manila.
Finance Secretary Benjamin E. Diokno represented the Philippine government while JICA was represented by Sakamoto Takema, the lender’s chief representative in the country.
The loan is concessional with an interest rate 0.10 percent per annum for non-consulting services and 0.01 percent per annum for consulting services.
The loan will be repaid in 40 years, inclusive of a 10-year grace period.
“The JPY17.4 billion (around $130 million) supplemental loan for the MRT 3 was approved by the NEDA Board on February 2, 2023 to finance the increase in the total project cost amounting to P29.6 billion, following the additional scope of work submitted by the Department of Transportation (DOTr),” the DOF said in its statement.
The additional scope of work identified by the DOTr include the following: integration and capacity expansion, complete rehabilitation, operation and maintenance (O&M) concession dovetailing with the expiry of the Build-Lease-Transfer (BLT) agreement in 2025, and addition and extension of maintenance works to account for the six-month period of community quarantine due to the COVID-19 pandemic.
“The rehabilitation includes provisions for capacity including rolling stock, rail tracks, signaling system, power supply system, overhead catenary system (OCS), communications system, and depot and station equipment,” the DOF said.
The DOF noted that the rehabilitation project was originally approved by the National Economic and Development Authority (NEDA) Board on August 22, 2018 “with the aim of improving the safety and service of the MRT 3.”
The DOF cited that Japan is the Philippines’s top official development assistance (ODA) partner as of March, with total ODA commitments at around $10.4 billion, which includes loans and grants.
“Following the signing of the loan agreement, Japan’s total loan net commitment now amounts to around $10.3 billion, with a total ODA commitment of $10.5 billion,” it said.
Image credits: Ed Davad