EXCLUSIVE: Egypt prepares to sign rail contracts

26 July 2017

Loan agreement to finance part of the deal has been signed

Egypt National Railways (ENR) is preparing to sign three separate contracts with US-based GE for the supply of 100 new locomotives, maintenance of 81 old locomotives and a 15-year technical support agreement.

The terms for the first two contracts are understood to have been finalised, while the terms for technical support agreement are still being negotiated.

According to sources familiar with the transaction, the three contracts, which together are estimated to cost up to $575m, could be awarded in August.

A $300m loan agreement with the European Bank for Reconstruction and Development (EBRD), which will cover part of the $575m deal, was signed on 19 June.

An export credit agency is understood to have agreed to finance the remaining portion of the deal.

These contracts are in line with Egypt’s plan to reform its ageing rail sector by adding new fleet and increasing fleet availability and improving operational efficiencies.

Future plans include the separation of freight operations and the introduction of track-access charges, which will provide a framework for future private sector involvement in the railway market.

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