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German bank lends €200m to Spanish rail

Munich-based Deutsche Pfandbriefbank is providing a €200m loan to help finance Spain’s burgeoning high-speed rail sector.

German real estate and public finance lender Deutsche Pfandbriefbank has agreed to provide a €200 million public finance loan to Administrador de Infraestructuras Ferroviarias (ADIF), the Spanish railway infrastructure company.

The loan will be used to finance investments for the development of Spain’s high-speed railway network, which ADIF manages.

Antonio González Marín, chairman of ADIF, said in a statement the facility will be used to support the company’s investment plan. Marín also expects the bank to be a major financial provider for ADIF.

The loan follows a deal struck in October 2009 in which the European Investment Bank agreed to provide €5 billion in financing for projects related to Spain’s high-speed rail network. The financing will go toward high-speed links being developed between 2010 and 2015.   

Spain is pushing forward with high-speed rail connections in all its major cities. By 2020, the country plans to have 10,000km of high-speed rail completed, meaning that 90 percent of its 40 million inhabitants will be within a few dozen kilometres of a high-speed rail line. This would make Spain a leader in terms of total high-speed rail trackage.

Munich-based Deutsche Pfandbriefbank was formed in mid-2009 by the merger of Hypo Real Estate Bank and DEPFA Deutsche Pfandbriefbank. It emerged from the restructuring of Hypo Real Estate Group, which was bailed out by the Bundesbank and other German banks in October 2008 in the midst of the global financial crisis.

The bank is 100 percent owned by the German government, according to its website.