The Inter-American Development Bank approved a $481 million loan to help Brazil's State of São Paulo expand and upgrade its Metro Line 5 (Purple Line). The improvements will benefit a large number of low-income residents of the western and southern areas of metropolitan São Paulo.

In 2013, when the metro line becomes fully operational, the number of Purple Line passengers will rise more than fivefold, from 120,000 to 644,000.

The IDB’s loan will finance upgrading of eight existing six-car trains to bring them up to the same operating standards as the new fleet. It will also finance the design, implementation and supervision of several systems for the train operation, including telecommunications and power supply. The State of São Paulo will cover the cost of construction and supervision of tunnel works and track (12 km of tunnel and 11 new metro stations), the purchase of 26 new 6-car trains and signaling system (CBTC- communication-based train control).

The Purple line extension will connect the terminal station Largo Treze with Chácara Klabin on the Line 2 (Metro Green Line). This will reduce travel time to downtown for low-income users in southern neighborhoods by nearly 54 minutes. It will also provide access to eight major hospitals, making basic public services more accessible to a broader spectrum of society.

Additionally, the extension is expected to cause a major shift in traffic patterns, as users move from buses and private cars to the metro. As a result, the number of buses serving the corridor is anticipated to drop from 955 to less than 600. The extension of Line 5 will entail significant environmental benefits by reducing fuel consumption (50 million liters of diesel and 70 million liters of gasoline per year) and in emissions of air pollutants (17,000 tons per year) and carbon dioxide (257,000 tons per year).

Incorporation of digital signaling and track control systems will help cut waiting time between trains from five minutes to two minutes, and enabling more users to travel in greater comfort.  Station platforms will have safety glass doors that will open only for loading and unloading, while stations and trains will be equipped with devices meeting the needs of persons with disabilities. All trains will have a fire emergency system, air conditioning, and free movement between cars.

In 2008, the IDB financed two urban transportation projects in São Paulo: upgrading Metro line 4, with a $129 million loan. The second loan of $168 million helped purchase new trains and control systems, and financed technical studies to expand public transportation in the southern part of the city, where most of low-income population lives.

The new Bank loan is for a 25-year term, with a 4 ½-year grace period and a LIBOR-based interest rate.