Japan International Cooperation Agency (JICA) announced on Tuesday that it has signed a loan agreement with the Government of Egypt to provide a Japanese ODA loan of up to 41,000 million Japanese yen ($306 million) for the Greater Cairo Metro Line No. 4 Phase 1 Project II.

The project aims to meet transportation demand, mitigate traffic congestion, and improve air pollution in the Greater Cairo Area by constructing a new metro (approximately 19 km in length) in the south-west of Greater Cairo and in the city centre of Cairo, JICA said in a press statement.

The project is scheduled for completion in February 2028, the statement said.

The Special Terms for Economic Partnership (STEP) scheme will apply to the Japanese ODA loan with Japanese systems and trains being installed at the metro. Under STEP, the main contract is Japan tied and subcontracting is general untied.

The statement said the project will contribute to the achievement of SDGs (Sustainable Development Goals) Goals 9 (Industry, innovation and infrastructure), 11 (Sustainable cities and communication), and 13 (Climate action).

The annual interest rate on the loan under the agreement is 0.1 percent and 0.01 percent for project, and consulting services respectively with a 40-year repayment period and 10-year grace period.

This is the second loan following the first loan of 32,717 billion yen ($245 million) provide in March 2012 to advance the construction of the metro line.