MEDWAY CARGO ROLLING STOCK

Promoter – Financial Intermediary

MEDLOG SA

Location

• Portugal

Description

Acquisition of 16 electric locomotives and 113 intermodal wagons to provide new rail cargo services in Spain and Portugal.

Additionality and Impact

The project is expected to enable modal shift from road to rail, thereby enhancing sustainable transport in line with EU objectives and reducing negative transport externalities. The project contributes to meeting the Bank's CA&ES target. The rolling stock will provide services predominantly in less developed or transition regions and thereby support the strengthening of the EU's economic, social and territorial cohesion. The project supports the deployment of the European Rail Traffic Management System, which creates network-wide benefits that are higher than those experienced by each operator individually.The Bank's contribution will be visible through both financial and non-financial elements. The Bank's experience in lending to the rail sector and in analysing project finance transactions will improve the structuring of the transaction, through close co-operation with the promoter and commercial lender(s). The EIB commitment will additionally provide for a significant financing amount at affordable terms (long tenor, acceptable structure of repayment and affordable pricing), thereby strengthening the Bank's financial contribution to the project.

Objectives

The project contributes to expanding rail freight transport services, thus enabling a more efficient supply chain in Portugal and Spain and reducing transport costs for import and export goods. The project is therefore expected to increase the competitiveness and regional development of the region and contribute to sustainable growth and employment in Iberia. Additionally, the project is to be considered under the Climate Action (CA) objectives of the Bank, as it fosters a modal shift from road to rail and supports investments in electric rail transport, a zero direct emissions transport technology.

Sector(s)

• Transport - Transportation and storage

Proposed EIB finance (Approximate amount)

EUR 45 million

Total cost (Approximate amount)

EUR 93 million

Environmental aspects

The investments proposed under the project do not fall under either Annex I or Annex II of the Environmental Impact Assessment Directive 2011/92/EU as amended by Directive 2014/52/EU as manufacturing and use of rail rolling stock is not included in either list. The maintenance will be done by Medway Maintenance & Repair (ECM or Entity in Charge of Maintenance) in their existing workshop in Entroncamento. No construction works or retrofits will be needed on the workshops. All else equal, the project is expected to have a positive environmental impact by improving the modal share of freight rail in Spain and Portugal.

Procurement

The Promoter is a private company not operating in the utilities sector, and therefore not covered by EU Directives on Procurement. Procurement of the locomotives and wagons has taken place through a negotiated procedure between the company and various EU-based suppliers.

Status

Signed - 23/12/2021