Belgium extends loan for LRT-1 rehab

The Belgian government has agreed to help finance the continuing rehabilitation of the Light Rail Transit (LRT) Line I as it extended mixed loans worth 12.924 million euros.

The loan agreements were signed over the weekend between the governments of Belgium and the Philippines, the Light Rail Transit Authority (LRTA) and Fortis Bank Brussels.

Finance Secretary Juanita Amatong said the mixed loans will be used to finance the second phase of the LRT Line 1 modernization project through the procurement of systematic and non-systematic spare parts.

Amatong said part of the loans would also be used to acquire additional parts not covered by the initial phase of the modernization program.

The financing scheme would involve a 6.296-million euro state-to-state interest-free loan from the Belgian government. Amatong said it would be payable in 20 years after a 10-year grace period.

The facility would also involve a 6.627-million euro buyers credit facility from Fortis Bank Brussels.

Amatong said the facility would carry an interest rate fixed on the prevailing approved rate of the Organization for Economic Cooperation and Development (OECD) — an exclusive group of the world’s most industrialized nations - at the date of signing.

"Right now, that rate is quoted at 5.02 percent per annum," Amatong said. "It will carry a maturity of 13 years inclusive of a three-year grace period."

The modernization of LRT Line 1 requires the upgrading of the existing fleet, upgrading of critical electronic and major equipment and the upgrading of the existing light rail vehicle washing plant.

LRTA also plans to upgrade and/or replace all technologically obsolete parts and equipment, as well as continue the repair and rehabilitation of the LRT Line 1 system, particularly the rail vehicles.

"The idea is to ultimately bring the system to a level that would fully normalize and sustain fleet availability in order to serve LRT commuters in the safest and most comfortable way possible," Amatong said.