EIB provides €45 million for rail freight operator Medway

The European Investment Bank (EIB) today lent €45 million for the acquisition of 16 electric locomotives and 113 intermodal wagons by Medway, formerly CP Carga, expanding rail freight transport in Portugal and Spain.

In a statement, the EIB said it had signed “a €45 million agreement with Medway ROSCO, a subsidiary of Medway Operador Ferroviário de Mercadorias”.

“The project supports the expansion of rail freight services in Portugal and Spain – including cross-border – thus enabling more efficient supply chains in both countries,” the European Union (EU) bank added in the press release.

The EIB is co-financing this operation to purchase 16 electric locomotives and 113 intermodal wagons by Medway ROSCO with Santander Totta, the Portuguese subsidiary of Banco Santander, which is providing the basis for the project’s financing structure.

While the EIB is putting up €45 million, Santander Totta is providing €77 million.

With this fleet expansion, there is then an extension of rail freight services and a modal shift from road to rail.

The aim is to “facilitate cross-border traffic on the Iberian Peninsula and reduce transport costs for the import and export of goods”, notes the EIB, pointing out that the services in question are aimed “predominantly at the less developed or transition regions in Spain and Portugal, helping to strengthen the EU’s economic, social and territorial cohesion objectives and promote sustainable transport”.

At the same time, the project supports the development of electric rail transport, a transport technology with zero direct emissions, that could include the transport of lithium, timber, chemicals and other products, as well as new regular container lines from the port of Sines to various destinations across the Iberian Peninsula.

Around 940 jobs are expected to be created during the execution phase (between 2022 and 2023) and 56 jobs during operation, according to the EIB.

Quoted by the note, EIB Vice President Ricardo Mourinho Félix said that “the new locomotives and intermodal wagons will improve interconnectivity in Spain and Portugal while reducing traffic, pollution and transport costs.”

“As the EU’s climate bank, we make our knowledge and experience in the railway sector and project financing structures available to Spanish and Portuguese citizens to successfully implement these operations,” concludes Ricardo Mourinho Félix.

Medway, formerly known as CP Carga, is a logistics operator and the largest private rail freight operator in the Iberian Peninsula.

It is the largest rail freight operator in Portugal, with a market share of around 90%.