An eight-mile metro rail line is to be built in Hanoi after the European Investment Bank granted a £64 million loan to Vietnam to finance its construction.

The £600 million line will run from Nhon in Tu Liem district to Hanoi's railway station in Hoan Kiem district.

There will be 12 stations along the route, which is designed for a maximum speed of 50mph with a total travel time of about 20 minutes.

Work started in September 2010 and the line is expected to be operational by 2015 and is expected to carry 200,000 passengers a day to ease traffic congestion in the city which has a population of six million.

The project also includes the construction and equipping of a new depot and purchase of rolling stock to operate the line.

The French Government has already provided £240 million for the metro line and the rest of the funds are coming from the city's state budget.

The project, part of the Vietnam ministry of transport's master plan, aims to reduce the use of private transport and enhance the urban environment and is the first EIB-financed metro line in Asia.

The city transport plan envisages construction of five urban railway lines by 2020, linking the city centre with urban centres in Bac Ninh, Vinh Phuc, Hung Yen and Thai Nguyen.