Bank backing for Scottish rail network

Several organisations, including Germany’s KfW IPEX-Bank, are financing rolling stock for the ScotRail franchise.

Germany’s KfW IPEX-Bank, together with SMBC and RBS/Lombard, have provided structured financing for the Scottish railway network, known as Scotrail. In a statement, KfW-IPEX said its contribution to the financing was £140 million (€193 million; $207 million).

The financing is to pay for 46 three-car trains and 24 four-car trains produced by Hitachi Rail Europe, with the deal also including a 10-year maintenance arrangement. The trains will be leased to Dutch firm Abellio, which in October last year won the £6 billion franchise to run Scotrail for a decade. The franchise period commences tomorrow.

As a whole, Scotrail comprises 347 train stations, almost 800 trains and 4,850 employees. The franchise period will include the electrification and expansion of the Glasgow-Edinburgh line and the roll out of new trains during 2017 and 2018.

By expanding the Glasgow-Edinburgh line, the aim is to ease private transport congestion between Scotland’s two largest cities and enable better mobility for the densely populated central belt with faster journey times and higher capacity.