The contract for a direct loan of EUR 110 million for modernising regional railway lines and purchasing new generation rolling stock was signed today, Friday 15 November, in Rennes by Mr Josselin de Rohan, President of Brittany's Regional Council, and Mr Francis Mayer, Vice President of the European Investment Bank (EIB).
Brittany is the first Regional Council to benefit from EIB support for upgrading regional rail transport since the entry into effect of the Solidarity and Urban Renewal Act on 1 January 2002, when the French Regions assumed responsibility for organising transport services.
The loan will underpin Brittany's large-scale programme of investment in infrastructure and rolling stock. Co-financed by the Government, RFF and SNCF, the infrastructure component of this project primarily involves extending the TGV service from the capital, raising the maximum speed on the Rennes-Quimper (222 km) and Rennes-Brest (252 km) lines from 160 to 220 km/h, and electrifying the Rennes-Saint Malo line (98 km) to provide a service of 140 km/h. The rolling stock component consists of the purchase by the Region of 17 Z-TER trainsets - destined for city-to-city links, especially Rennes-Saint Malo, Rennes-Lorient, Rennes-Quimper and Rennes-Brest - and 6 AGC large-capacity trainsets earmarked for suburban services.
This EIB operation will enable the Brittany Region to diversify the borrowings needed to finance the programme on the best interest rate and maturity terms. It may be complemented by further financing channelled through established intermediary banks, which will dispose of an additional EUR 70 million credit line made available by the EIB's Board of Directors for this project.
The loan will further two of the Bank's objectives: regional development and environmental protection. Once completed, the works will encourage the shift of a large proportion of regional traffic from road to rail, while eliminating substantial road safety risks (41 level crossings) and the air pollution generated by old diesel engines still in use on the Rennes-Saint Malo line.
The European Investment Bank, the EU's financing institution, funds infrastructure projects throughout the Union, notably in the transport sector. This new operation brings EIB lending for Brittany's economic development to almost EUR 1 billion. Large-scale projects financed include the Val de Rennes metro; drinking water distribution systems in Ile-et-Vilaine, Finistère and Morbihan; power supply and fixed telephony networks in rural areas; and the construction or upgrading of a number of agricultural processing plants. At the same time, the EIB has, via its global loans to the banking sector (in particular, CLF/Dexia and Crédit Mutuel de Bretagne) supported the financing of hundreds of public infrastructure and SME projects in Brittany.
In 1962, shortly after its creation in 1958 under the Treaty establishing the European Community, the EIB financed modernisation of the railway lines serving Brittany: Le Mans-Rennes-Quimper/Brest.
As the leading source of bank finance for Trans-European Networks, the EIB devotes a large chunk of its lending to rail transport. It has provided EUR 13 billion over the past five years, primarily for high-speed rail services in France, Belgium, the Netherlands, Italy and Spain, but also for the acquisition of rolling stock in France, the United Kingdom, Denmark, Sweden, Greece, Spain and Portugal, as well as for standard lines in most countries of the EU, Central and Eastern Europe and the Balkans.