OREANDA-NEWS. May 15, 2013. A long-term EBRD loan will help finance the first western investment in Belarus’s rolling stock manufacturing sector, based on the successful reorganisation of a former state-owned producer of trams and trolley-buses and creation of a privately-owned company controlled by a strategic Swiss investor, Stadler Rail AG.

The EBRD is providing EUR 14.5 million under a loan of up to 10 years to a joint venture formed by Switzerland’s family-owned Stadler, a world market leader in the manufacture of rail rolling stock, and the Minsk Region Executive Committee (MREC) as a minority shareholder.

The Belarus partner is contributing assets from the leading local manufacturer of trams and trolley-buses, Belkommunmash (BKM) whilst Stadler will bring private capital, as well the latest technologies and know-how for the production of trams, trolley-buses and passenger trains.

The export-oriented joint venture will focus on producing electrically-powered vehicles for public transport covering the urban, suburban and inter-regional markets.

Its main export market will be the Commonwealth of Independent States (CIS), which has the world’s largest public transport fleet, including nearly 70 percent of the all working trolley-buses and 40 percent of its trams. Russia is the largest single market for both these forms of public transport.

This project marks the first investment by a western sponsor in the construction and operation of modern rolling stock manufacturing facilities in Belarus and can serve as an example for other foreign investors considering manufacturing opportunities in Belarus, said Thomas Maier, the EBRD’s Managing Director for Transport and Infrastructure.

Stadler’s goal with this investment is to create a foothold in CIS markets. The transaction gives the Swiss group access to the rolling stock market for broad gauge railways in northern Europe and boosts export opportunities for rolling stock manufactured in Belarus.

Once the joint venture’s train production reaches planned capacity, it expects to export about 90 percent of its production outside Belarus, mainly targeting the Russian market.

The EBRD’s funds will be used to build a modern facility for manufacturing suburban and interregional passenger trains, as well as trams, at a greenfield site in the Fanipol Free Economic zone 4 km southeast of the capital, Minsk.

In addition, BKM’s existing Minsk production facility for trolley-buses, will be refurbished to bring it up to Stadler’s international standards.