German co offers 3 bln euro financing for Russian high-speed rail

MOSCOW, Nov 15 (PRIME) -- The German Initiative consortium, which includes Siemens, has offered a 2.7 billion euro financing to Russian Railways for the Moscow–Kazan high-speed railroad project and attract up to 800 million euros more to the project, Russian Railways’ First Vice President Alexander Misharin told reporters on Tuesday.

“We’ve received the project which has a statement of the Russian and German governments and a memorandum on cooperation between Russian Railways, the German Initiative and Siemens. It comprises proposals, and we are studying them, we have held negotiations. The issue is about financing amounting to 2.7 billion euros plus (attraction of) 800 million euros,” he said.

“But we have to define conditions once more, as it envisages insurance coverage from Germany, and that defines conditions for supplies of the German equipment, and we are yet to study it.”

A representative of High-Speed Rail Lines, the company that implements the project, said that the German company held consultations with the country’s government, credit insurance company Euler Hermes, and German banks, and sees a possibility to organize corresponding financing of equipment and services supplies with an insurance coverage of up to 2.7 billion euros.

“The German side…also sees a possibility to attract the necessary shareholder capital of up to 50% from the German side and from sides of other competent international institutional investors, including provision of Germany’s investment guarantee for ensuring possible direct investments of up to 800 million euros,” the representative said.

The 1.068 trillion ruble 770-kilometer Moscow–Kazan railway, part of a planned 7,000-kilometer railroad between Beijing and Moscow, is supposed to reduce the travel time to 3.5 hours from 11.5 hours by regular railway. China earlier agreed to lend an equivalent of 400 billion rubles for the project and will also provide 52 billion rubles of equity financing and an additional U.S. $1 billion.

(65.8591 rubles – U.S. $1)

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