NDB seeks to finance part of RZD’s RUB 501 billion Program to acquire more than 3,500 new locomotives between 2019 and 2025.

The Program’s objective is to replace around 20% of RZD’s fleet with new locomotives to (i) increase traction power over the network while enhancing the average daily productivity of each unit by around 10%; (ii) reduce transportation costs through lower consumption of energy and fuel, and reduced duration of idle time for maintenance; and therefore (iii) reduce locomotive greenhouse gas (GHG) emissions.

RZD’s Program is one of the largest infrastructure projects currently under implementation in Russia. The Program will contribute to the following targets based on strategic documents which were approved by the Government of the Russian Federation: (i) an increase in freight turnover (net of empty runs) by 22%, (ii) a decrease in specific electric power and fuel consumption of railways by no less than 3% and 5% respectively, and (iii) reduction of RZD’s CO2 emissions by 4.5% in 2025 (all targets compared to 2018 level).

The Program started in 2019 and will span over 7 years with last deliveries of locomotives planned for 2025. Procurement will be carried out by RZD in accordance with its existing procurement procedures and applicable Russian legislation.

The Program has been categorized as Category B in line with NDB’s Environmental and Social Framework (ESF). The Program will have significant positive impacts on E&S aspects due to the replacement of old locomotives (which have completed their extended service life) by adding advanced, efficient and certified locomotives. Operation and maintenance of locomotives and facilities (such as depots, fueling stations), will have E&S risks, but these are mitigated by adherence to the country’s system and corporate management systems of RZD.

The total cost of the Project is estimated at RUB 501 billion. Financing sources are as follows: