Leasing startup Nexrail has signed a deal to acquire an initial portfolio of 53 shunting locomotives that are already operated under leasing agreements, supplemented by up to 50 brand new SmartHybrid locomotives to be delivered from 2023 onwards. The units are manufactured by Europe’s leading shunting locomotive manufacturer Vossloh Locomotives. These are small railway locomotives used to assemble rolling stock into complete trains. 

KfW IPEX-Bank, CA-CIB, Helaba and ABN AMRO provided the financing package for the main part of the portfolio as co-arrangers. KfW IPEX-Bank also acted as facility and security agent. Nexrail was advised on the portfolio acquisition and financing by Watson Farley & Williams.

In April 2020 the German Bundeskartellamt cleared the acquisition of Kiel-based Vossloh Locomotives GmbH by CRRC Zhuzhou Locomotives Co. The company was at the time a subsidiary of Vossoh AG. Vossloh Locomotives is the market leader in the manufacture of diesel-powered shunters in the European Economic Area and in Switzerland. CRRC is a subsidiary of China Railway Rolling Stock Corporation, and the world’s largest manufacturer of rolling stock.

Nexrail is backed by French infrastructure fund InfraVia Capital Partners. It will supply low-emission locomotives for unelectrified routes, and is initially dedicated to the freight and shunting markets.

KfW IPEX notes that rail freight transport is playing a pivotal role in decarbonizing transport supply chains due to its low CO2 footprint compared to other ways of transporting cargo, including on non-electrified parts of the network.

As a result, European governments are promoting a modal shift towards rail. Almost half of the European rail network is unelectrified (both public and private networks) and is expected to remain so for the foreseeable future due to geographical conditions, safety (e.g., operational requirements in ports and industrial yards) or economic reasons (low traffic volumes and cost of electrification infrastructure).

Nexrail is positioned to address this market by replacing an old stock of shunting locomotives with new, modern hybrid locomotives meeting latest emission and fuel-efficiency standards and compatible with sustainable fuels. Nexrail’s team is working closely with engine and locomotive manufacturers on  HVO (hydrotreated vegetable oil) and e-fuel compatibility, as well as hydrogen applications, to ensure market adoption as soon as they become commercially available.