CAF to Finance São Paulo Metro Expansion with USD 550 million

The Ministry of Finance and Planning of the State of São Paulo and CAF—development bank of Latin America—signed today in Brasilia the USD 550 million credit operation for the expansion of Section 2-Green of the city’s underground. This is the largest financing operation by CAF in Brazil.

The ceremony was attended by Secretary of Finance and Planning Felipe Salto, CAF representative in Brazil Jaime Holguín, Federal Finance Prosecutor Ana Lucia Gatto, and São Paulo Metro president Silvani Pereira.

“The signing of the agreement with CAF is a culmination of the major investment process in the state of São Paulo. The more than 3,000 jobs already created in the worksites so far—with more to come—in addition to the benefits of the project for users of metro-rail transport, show that prioritizing investments in infrastructure is the right strategy,” said Salto.

“By securing financing for such projects, especially with multilateral organizations like CAF, São Paulo lays new foundations to continue growing and attracting investments and high-quality jobs,” added the Secretary of Finance.

“The long-standing partnership with the State of São Paulo involves multiple road, sanitation and urban mobility projects. Today is an important day for this partnership, as we signed CAF’s largest loan in Brazil, aimed at financing strategic infrastructure works for the São Paulo Metro, thus improving the quality of life of the population of the metropolitan area,” said Jaime Holguín.

The total term of the loan is 23 years, including a six-year grace period. The State’s counterpart is USD 137.5 million. The works are currently under way and USD 353 million have already been invested from the State of São Paulo’s own funds, of which USD 121 million were disbursed in 2022.

CAF’s financing covers infrastructure, rolling stock and project management. The total investment for the expansion project is USD 1,06 billion. Some 3,500 direct jobs have been created to date, and a total of 5,000 are expected to be created at the peak of the works.

The expansion of Line 2-Green aims to meet the growing demand in the transport system of the Metropolitan region of São Paulo, in addition to improving the offer and mobility, connectivity, safety and comfort of public transport, in addition to reducing greenhouse gas emissions.

Currently, Line 2-Green operates on the Vila Madalena-Vila Prudente section. The 8.4 km expansion from Vila Prudente to Penha—a project included in the program to expand the metro network and modernize rolling stock in the state of São Paulo—includes eight new stations, parking for trains and will serve the Leste area, one of the most densely populated regions in the city of São Paulo. The purchase of 22 new trains to serve the new section is already underway.

As for the number of beneficiaries, Line 2 currently transports 800,000 commuters/business day, and by 2026—when the new section is scheduled to come to service—it is expected to serve almost 1.5 million commuters/business day. With the planned expansion, according to studies carried out by the company, the average travel time will be cut by around 25 minutes for users of the new section, with the potential also to reduce the number of buses circulating in the region by around 30%.