Brunswick Rail (f. Bravo)

Location:

Russia

Project number:

44580

Business sector:

Transport

Notice type:

Private

Environmental category:

B

Target board date:

17 Oct 2012

Status:

Completed

PSD disclosed:

26 Oct 2012

Translated version of this PSD: Russian

Project Description

The EBRD participated in Brunswick Rail’s USD 600 million Eurobond debut with an amount of USD 25 million.

The proceeds of the Eurobond will mainly be used for repaying any outstanding amounts under the existing EBRD and IFC loan facilities and for the acquisition of railcars.

Transition Impact

The EBRD participation in the Eurobond will continue to support the transition objectives of the original project, which were to support greater private sector participation in the rail sector, promote increased competition and demonstrate the use of rail car leasing as a new product in Russia. These objectives will be strengthened in a number of ways by this new transaction. As a debut issue, the Eurobond will open up a new investor base and introduce Brunswick Rail to international capital markets. By using part of the Eurobond proceeds to refinance the existing EBRD and IFC loan facilities, Brunswick Rail balance sheet will be streamlined, removing the ring-fenced project finance structures. Finally, the acquisition of railcars from the remainder of the bond proceeds, including new generation railcars, will increase competition and role of the private sector and demonstrate the use of a new energy efficient product on the Russian market.

The Client

Brunswick Rail Limited, a leading, dedicated freight railcar operating lessor in Russia, which operates a fleet of more than 22,000 freight railcars and serves a number of key clients from core Russian industries, including transportation companies.

EBRD Finance

USD 25 million Eurobond subscription.

Project Cost

USD 600 million.

Environmental Impact

The Project has been categorised B in line with the Environmental and Social Policy (2008). The railcars to be purchased with the Bond proceeds will be modern and compliant with Russian regulatory and technical requirements, which are compatible with EU environmental and noise standards for railcars and freight wagons. The Company's operations are in compliance with relevant environmental, health, safety and labour regulations. The Company’ Environmental Strategy includes commitments to identifying potentially affected parties; analysis of issues and identification of magnitude of impacts and developing relevant action plans.

The Company conducts assessments of risks associated with the use of railcars. The Company's lease contracts contain a clause binding lessees to strictly following manufacturers' specifications for use of rail cars. The Company also imposes contractual limitations on types of hazardous cargo that can be transported in their leased railcars and checks information on types of transported cargo on a monthly basis The Company has a programme in place for scrapping of old railcars and utilisation of spare parts and wheel-sets and contracts a licensed third-party for collection and utilisation of spare parts.

The Company has software in place allowing extracting information on the lessee and specific lease data; individual railcar plate number, model and manufacturing date; technical status; schedule of required maintenance and repairs. The Company also monitors location of leased railcars; movement route; type and volume of transported cargo and other data through the Russian Railways (RZD) Data Processing Centre.

The Company will comply with The Bank’s Performance Requirements and submit annual environmental and social reports to the Bank.

Technical Cooperation

None.

Company Contact

Mr. Nicolas Pascault,
Partner /CFO
115054, Russia, Moscow,
Paveletskaya sq.2/2, 12th floor
E-mail: npascault@brunswickrail.com

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.