KfW IPEX-Bank
KfW IPEX-Bank – Indermodal Freight Transport: Market Potential & Challenges
This article first appeared in the Railway-News magazine Issue 4 2021.
By Dr Carsten Wiebers, Global Head of Aviation, Mobility & Transport, Torsten Osterloh, Team Leader Mobility & Transport at KfW IPEX-Bank, and Wolfram Bahle, Managing Partner / CSO at the Swiss start-up MFD Rail
The federal government of Germany has been supporting the expansion and revitalisation of the intermodal transport system in Germany and Europe for more than 20 years.
During this time, the transport of goods, commodities and machine parts using at least two different modes of transport in the supply chain has developed into a segment with dynamic growth – the “moving average mid-term prognosis” of the German Federal Ministry for Goods Transport (BAG) currently estimates that the volume of rail freight transport will increase to 390 million metric tonnes by 2024. This is not only due to capacity that is much easier to scale, but also due to the role that intermodal freight transport plays in achieving the climate targets formulated in political discourse. It will not be possible to successfully transform transport without including railways in the supply chain. This is why KfW IPEX-Bank and MFD Rail, together with the majority shareholder of MFD Rail, a fund advised by Oaktree Capital Management, L.P., are involved in CO2-efficient rail freight transport and are thus contributing to the success of the transport transition.
The Development of Intermodal Freight Transport
The networking of global markets in the course of globalisation and the success of online retail have swept global goods transport along with them over recent decades; goods transport has grown by around 75 percent in the last 30 years – but rail transport has only played a very small part in this. This disparity has tangible repercussions, two of which we will briefly discuss here. On the one hand, existing infrastructure is used unevenly. On the other hand, lorries produce significantly higher emissions per kilometre when compared to rail-based solutions and thus cause more damage to the climate. From an economic perspective, this creates a need for investments – the state, investors and even financial institutions will play a central role here, including KfW IPEX-Bank as a financing partner with a great deal of expertise in financing passenger and freight transport projects. It has been continually expanding its financing in the railway sector for years.
