Light Rail Manila Corp., a joint venture of Metro Pacific Investments Corp. and Ayala Corp., is set to finalize the financing package for the P65-billion Light Rail Transit Line 1 Cavite extension project.
First Metro Investments Corp., the investment banking unit of Metrobank group, is one of the arrangers tapped by the rail operator to handle the transaction.
First Metro executive vice president Justino Juan Ocampo confirmed the company was one of the arrangers for the project financing of LRT 1 Extension project.
Ocampo said a syndicate of banks would be involved in the deal and that the loan facility would have a minimum tenor of 10 years.
“The financing for LRT 1 Extension is on track for closing in the first two months of 2016, February at the latest,” Ocampo said.
Ocampo did not disclose the value of the loan agreement and how many local banks would be involved in the deal.
Under the concession agreement signed by LRMC with the Light Rail Transit Authority, the consortium is allowed to finance 70 percent of the project cost through borrowings and loans and the 30 percent through equity infusion by the members of the consortium.
The company earlier said it was in talks with five banks for the financing of the project.
LRMC was the only bidder that submitted the technical and financial proposals for the LRT 1 project in 2014.
The P65-billion project will extend the existing 20.7-kilometer LRT Line 1 system, which runs from Roosevelt Ave. in Quezon City to Baclaran in Parañaque, by an additional 11.7 km. southward to Bacoor, Cavite.
Once operational, the new line will increase the number of daily passengers at LRT 1 from 500,000 to 700,000.
Under the bidding contract of the LRT 1 project, half of the P65-billion project would be invested by private sector for the civil works on the extension to Bacoor, while the government would spend the other half to procure 39 new train sets for the mass transit line, apart from acquiring and delivering the required right of way.
The extended rail line is envisioned to help ease the worsening traffic condition in the Parañaque-Las Piñas-Cavite corridor. It is also expected to enhance commercial development around the rail stations.