This article first appeared in the Railway-News magazine Issue 5 2021.
KfW IPEX-Bank’s Director Origination & Structuring, Mobility & Transport Frank Hermandung on the technological developments within the European rail freight sector and its modal share.
Q: Mr Hermandung, what is KfW IPEX-Bank’s interest in European rail freight transport?
Frank Hermandung: Financing for environmentally friendly passenger and freight transport in Europe, but also around the world, is a core focus of KfW IPEX-Bank, which is responsible for commercial transport and infrastructure financing within KfW Group. We have been committed to the sector with a large team and portfolio for decades, financing both start-ups as well as established market operators. Railway lines, railcars, locomotives and signalling technology: our domain includes everything that requires financing in the wheel-rail system.
Q: What are the latest trends you’ve seen? Have railways entered the 21st century?
FH: Railways in Europe have a long history; many technical elements date back to the last two centuries. It has only been in recent years that freight cars, for example, have stopped using sheer force and extreme power to brake by pressing a steel block on to the freight car wheel tread – a technique from the 19th century.
To date, however, the only change made with tremendous effort by European railcar lessors and operators has been in the material used: the cast-iron block brake is now made of a more suitable material. It is interesting to note that it was not efficiency that led to this development but the need to limit noise emissions.
By its very nature, however, the rail system is slow moving; changes do not take effect on a small scale, as is the case with lorries, but require enormous investments in a huge integrated system with much more closely linked infrastructure and rolling stock. At the same time, the safety and regulatory requirements are much higher than for road transport. In addition, railways, in their capacity as public infrastructure, provide public services and are thus sometimes subject to requirements other than purely economic ones.
Railway-News magazine Issue 3, September 2022: KfW IPEX-Bank – The Asia Pacific Rail Market: Current Dynamics and Investment Trends.
Railway-News magazine Issue 4, September 2021: KfW IPEX-Bank - Indermodal Freight Transport: Market Potential & Challenges.
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KfW IPEX-Bank, European Investment Bank (EIB) and NORD/LB are jointly financing the expansion of public transport in the Chemnitz region.
KfW IPEX-Bank is financing MFD Rail's investments in new freight cars. The funds will be used to finance up to 6,500 new intermodal railcars.
KfW is providing an estimated 440 million EUR to assist the Indian city of Surat with its energy-efficient metro system development.
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KfW IPEX-Bank co-arranges financing of 50 new SmartHybrid and 53 existing modern shunting locomotives to be acquired by Nexrail.
Bayern LB, Helaba and KfW IPEX-Bank are co-financing the acquisition of 32 modern Coradia Continental electric multiple units for HLB.
KfW IPEX-Bank join the financing of Aves One AG, arranging a €75 million warehouse facility to expand their rail freight wagon portfolio.
KfW IPEX-Bank, ABN AMRO Bank, Crédit Agricole Corporate & Investment Bank and ING Bank are supporting Railpool's investments.
KfW IPEX-Bank supports the freight transport sector once again, financing new company Wascosa UK Ltd. to purchase freight wagons.
KfW IPEX-Bank is providing EUR 80 million towards the financing for new electric multiple units acquired by the passenger rail company ÖBB.
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