€290 million loan to Egyptian National Railways
Millions of commuters across Egypt will benefit from a €290 million financing provided by the EBRD to support the Egyptian National Railways (ENR) in its fleet expansion and upgrade of services.
As part of ENR’s locomotive renewal programme, the EBRD will finance the acquisition of up to 100 new diesel locomotives under a supply-and-maintenance contract outsourced to the private sector in accordance with the EBRD’s procurement policy.
The ENR fleet of locomotives is very old with an average age of 30 years. This has caused a lack of availability, along with issues regarding carbon emissions and maintenance. The acquisition of the new locomotives will enable the railway company to provide a more reliable and higher quality service to its customers.
The new fleet will also contribute to lowering carbon emissions by replacing life-expired inefficient rolling stock, delivering additional revenues due to better locomotive availability, improving access to jobs and achieving significant operating cost savings through improvement in fuel consumption.
Furthermore, the EBRD will provide technical assistance support to ENR to develop and implement a comprehensive freight reform programme and a commercialisation plan for the freight sector. This includes the separation of freight operations from passenger transport and the introduction of track-access charging.
Technical assistance will also support ENR in implementing a focused awareness campaign to make railway transport safer for women. Improving safety will contribute to increased access and ridership of both men and women to transport services which are essential for access to jobs and economic inclusion.
“This project will provide a better quality of life and economic development opportunities. It complements the EBRD’s continued support for Egypt’s development strategy of building new roads, highways, tunnels and connections across the country,” said Dr Sahar Nasr, Minister of Investment and International Cooperation.
Janet Heckman, EBRD Managing Director for the Southern and Eastern Mediterranean (SEMED) region and Head of the Egypt office, said: “We are proud to contribute to the development of a sector of utmost importance for Egypt. This is a key step in supporting the development and reform of the transport sector in line with the EBRD’s Green Economy Transition approach. Providing a reliable rail service is important for the quality of people’s lives and their businesses and consequently the whole economy.”
This investment will strengthen the competiveness of the railway company and will improve the environment in line with the EBRD’s Green Economy Transition approach under which the Bank aims to increase the volume of its green financing to 40 per cent of its total Annual Business Investment by 2020.
Egypt is a founding member of the EBRD and has been receiving funding since 2012. To date the Bank has invested €2.3 billion in 47 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services and support for transport services. The EBRD has also provided technical assistance support to more than 500 small and medium-sized local enterprises.