A consortium of banks headed by State Bank of India (SBI) has agreed to offer loans for the construction of Mumbai-Nagpur expressway.

SBI is the largest public sector bank in India. It has agreed to provide a loan worth Rs85bn ($1.195bn) for the project.

Other financial organisations that have agreed to support the project are Punjab National Bank, Bank of Baroda and Bank of Maharashtra, as well as the Life Insurance Corporation (LIC) of India.

Also known as Nagpur-Mumbai ‘Samruddhi Corridor’, the expressway is expected to incur a total cost of Rs550bn ($7.73bn). From this, Rs260bn ($3.65bn) will be spent on the construction of the expressway.

“The consortium has agreed to solve the major issue of financial support for the project.”

Maharashtra Chief Minister Devendra Fadnavis’ Office principal secretary Bhushan Gagrani told PTI: “We were falling short of Rs30bn ($422.18m) to Rs40bn ($562.88m) to reach the target of Rs260bn ($3.65bn). However, the consortium of banks has agreed to share that backlog too. It has solved the major issue of financial support for the project.”

Gagrani further added: “In case of roadworks, the major concern of lenders is always delay in land acquisition.

“However, in case of this project, we have completed almost 95% of land acquisition. Impressed by this fact, they have agreed to share the financial burden of the project.”

The Samruddhi Mahamarg, which is being constructed by the Maharashtra State Road Development Corporation, will have a total length of 701km. Construction of almost 600km is expected to conclude by December next year.

The corridor will include 25 toll plazas, and the toll will be collected for a period of 40 years.