EBRD Supports Rail Modernisation in Egypt

Tuesday, 20th June 2017

By Nayrouz Talaat

Millions of commuters across Egypt will benefit from a 290-mn-euro agreement that the Egyptian government has signed with the European Bank for Reconstruction and Development to upgrade the Egyptian National Railways (ENR) services and expand its fleet, Invest-Gate reports.

The Egyptian ministries of investment and international cooperation as well as transport sign the agreement with the EBRB on June 20.

“Infrastructure is a key catalyst for boosting the investment climate. That is why we will focus more in the coming period on upgrading transportation and infrastructure,” Minister of Investment and International Cooperation Sahar Nasr tells Invest-Gate during the signing ceremony.

As part of ENR’s locomotive renewal program, the EBRD will finance the acquisition of up to 100 new diesel locomotives under a supply-and-maintenance contract outsourced to the private sector in accordance with the EBRD’s procurement policy.

Janet Heckman, EBRD Managing Director for the Southern and Eastern Mediterranean (SEMED) region and Head of the Egypt office, says: “This is a key step in supporting the development and reform of the transport sector in line with the EBRD’s Green Economy Transition approach. Providing a reliable rail service is important for the quality of people’s lives and their businesses and consequently the whole economy.”

The ENR fleet of locomotives is very old with an average age of 30 years. This has caused a lack of availability, along with issues regarding carbon emissions and maintenance. The acquisition of the new locomotives will enable the railway company to provide a more reliable and higher quality service to its customers.

The new fleet will also contribute to lowering carbon emissions by replacing life-expired inefficient rolling stock, delivering additional revenues due to better locomotive availability, and achieving significant operating cost savings through improvement in fuel consumption.

Furthermore, the EBRD will provide technical assistance support to ENR for the development and implementation of a comprehensive freight reform program and a commercialisation plan for the freight sector. This includes the separation of freight operations from passenger transport and the introduction of track-access charging.

Technical assistance will also support ENR in carrying out a focused awareness campaign to make railway transport safer for women. Improving safety will contribute to increased access and ridership of both men and women to transport services which are essential for access to jobs and economic inclusion.

“This project will provide a better quality of life and economic development opportunities. It complements the EBRD’s continued support for Egypt’s development strategy of building new roads, highways, tunnels and connections across the country,” says Nasr.

This investment will strengthen the competitiveness of the railway company and will improve the environment in line with the EBRD’s Green Economy Transition approach under which the international bank aims to increase the volume of its green financing to 40 percent of its total annual business investment by 2020.

The EBRD believes that successful economies should be competitive, well-governed, green, inclusive, resilient and integrated.

Egypt is a founding member of the EBRD and has been receiving funding since 2012. The bank has so far invested EUR 2.3 bn in 47 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services. The EBRD has also provided technical assistance support to more than 500 small and medium-sized local enterprises.

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