105 electric locomotives to modernize Kazakhstan’s railway fleet
Kazakhstan is at the heart of Eurasia and is crossed by five international transport corridors, hence naturally positioning it in a strategic location for the development of freight transport between Europe and Western China.
With around 21,000 km of tracks, the Kazakh railway network is one of the world’s biggest networks and a backbone infrastructure for the socio-economic development of the country by connecting all regions with transport arteries and providing transport communication and trade between Kazakhstan and other countries. Railways provide 68% of all cargo and passenger traffic to over 57% of the country.
In February 2023, Kazakhstan’s prime minister, Mr Alikhan Smailov, outlined plans for the delivery of locomotives, passenger coaches and wagons to increase the national railway company Kazakhstan Temir Zholy (KTZ) fleet. This plan to modernize transport assets, known as “Nurly Zhol” (“bright path” in Kazakh), included a fleet order for 369 electric locomotives to be supplied by French company Alstom.
Alstom, global leader in smart and sustainable mobility, manufactures electric locomotives in Alstom’s plants in Astana, Kazakhstan. Alstom is the only manufacturer of electric locomotives in Central Asia and the Caucasus region and the company’s current work with Kazakhstan is not new as it has been active in the Kazakh market for more than ten years. It has indeed developed the Prima T8 KZ8A model, an electric freight locomotive, specifically for the Kazakh rail freight industry. It’s one of the most powerful electric locomotives in the world, can run at 120 kilometers per hour and has been designed to operate in extreme weather conditions.
Societe Generale acted as Global Coordinator, Initial Mandated Lead Arranger and Facility Agent in a Bpifrance Assurance Export backed loan to finance 55 electric passenger locomotives and 50 electric freight locomotives supplied by Alstom. Financing structure encompasses a Green Loan facility for the passenger locomotives, as Alstom trains operated in Kazakhstan have 89% less gCO2/passenger km compared to cars, according to Alstom’s operational data.
At the heart of the energy transition, this tailor-made financing aims at supporting the green mobility development in this country where transportation is highly strategic. It is also perfectly aligned with Societe Generale’s shift in its business model towards sustainable financing and the bank’s ambition to promote electric mobility.
Alstom has been present in Kazakhstan since 2010 and remains committed to being a major contributor to the development of the rail manufacturing sector. Enabled by Societe Generale, Alstom and Kazakhstan Railways can continue to address the country’s mobility needs and grow its industrial competitiveness.
The conclusion of the loan agreement arranged by Societe Generale with the support of the state export credit agency BPIFrance allowed to raise attractive and long-term financing in the most efficient way. The purchase of 105 freight and passenger electric locomotives will significantly reduce the shortage of electric locomotives, as well as ensure an increasing demand for freight transportation.
We are extremely proud and honored to combine our strength, knowledge and experience for the benefit of KTZ and Alstom on this strategic mandate promoting the green mobility for freight traffic and passenger transportation.