The interest rate on the euro-denominated loan should be below 2% and the city can repay the principal over 40 years.
Prague City Councilors have agreed on the terms of a loan of up to CZK 23 billion (EUR 1 billion) to be granted to the city by the European Investment Bank for the construction of metro line D. The transaction only needs to be approved by members of the Prague City Assembly.
The CZK 23 billion loan covers almost half of the total cost of the metro line D construction between the Pankrac and Nove Dvory stops. Prague will have the option of drawing the loan in CZK or in EUR, while drawing in euros allows for interest rates below 2% per annum.
According to the city’s press release, the project for a new Prague metro line has attracted the attention of EIB experts as it is in line with the city’s approved climate plan and contributes to improving the quality of the environment. Prague, however, insists that the state contribute financially to the construction as well.
Edited and translated by Lucie Trávníčková.