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Brazil: World Bank Approves US$650 Million for the Sao Paulo Metro Line Five

April 20, 2010

WASHINGTON, April 20, 2010 - The World Bank today approved a US$650 million loan to the State of São Paulo, Brazil, in support of the São Paulo Metro Line 5 Project. The project will improve the access of metropolitan São Paulo’s almost 20 million residents – and particularly the poor - to safer, faster and more reliable public transportation, and finance studies to help decrease greenhouse gas emissions by the Metro system.  The Bank will finance the provision of trains and signaling materials as a part of the State’s broader, US$2.2 billion project.

"The expansion plan of rail-based passenger transport is an absolute priority for the Government of São Paulo, and the extension of Line 5 is fundamental to the integration of the entire southern zone of the city to the system, improving the quality of life in the most populous region of the Capital," said the Governor of São Paulo, Alberto Goldman.

The project is expected to help improve the city’s serious transit congestion problem by continuing the integration process for the subway, commuter rail and bus networks.  This will improve access to affordable transport for the low-income population, and help decrease one of the highest Metro passenger indices in the world.

The project is expected to significantly improve the wellbeing of the urban poor in the City of São Paulo,” said Makhtar Diop, World Bank Director for Brazil. “They are the main users of public transport, spend over a fifth of their income in fares, and are the affected the most by problems such as shortage of capacity at peak hours and long journeys to and from work and other public services.”

The first phase of Line 5 has been in operation since 2002.  It is currently being extended to link the busy Santo Amaro area to the city center.  This 11.7 km underground extension will transport 630 thousand people per day, adding almost 13% to the Metro's transport ridership. This will greatly enhance access by a large population to important employment areas as well as health and education facilities.

The loan will finance the acquisition and installation of at least 26 new trains and signaling equipment, as well as purchase platform screen doors for all stations of Line 5. A second component will provide technical assistance to fund studies to support the Metro’s climate change strategy and assess the impact of Line 5 on greenhouse gas emissions.

São Paulo has made impressive advances in integrating its rail-based network and bus systems and improving public transport quality of service. Equally important, the State has addressed  crucial issues such as the introduction of the single integrated fare and is now tackling transport-related climate change and pollution issues,” said Jorge Rebelo, World Bank Project Manager. “We would like to compliment the Government for their strong commitment and the priority given to the project and its resolve to address institutional issues which for many years were obstacles for the development of a fully integrated urban transport system.”

This is a $650.4 million, commitment–linked, US$ denominated IBRD flexible loan with variable spread option, repayable in 30 years with 5 years grace period. Since the first loan in 1952, the World Bank has invested approximately $4 billion in São Paulo (including today’s loan).

Media Contacts
In Brasília
Mauro Azeredo
Tel : +55-61-3329-1059
In Washington
Gabriela Aguilar
Tel : (+1 202) 473-6768