US Ex-Im Bank has approved a US$121.7mn long-term loan guarantee to support the export by General Electric of 200 locomotive kits to Kazakhstan’s state-owned national railway, Kazakhstan Temir Zholy (KTZ).
KTZ will use the kits to refurbish 100 of its 18-year-old model 2TE10 locomotives, extending their useful lives for another 15-20 years. The railway is undertaking the modernisation to meet the increased demand for freight and passenger traffic created by economic development.
The modernisation kits will extend the machinery’s life by 15-20 years.
The financing transaction is Ex-Im Bank’s second with KTZ. A US$33.1mn US Ex-Im guarantee backed the sale of 54 GE kits to KTZ in December 2003.
The transaction is structured as an asset-based financing, with the locomotives serving as collateral. KTZ is the first non-bank government-owned company in Kazakhstan to receive US Ex-Im Bank-supported financing without a sovereign guarantee.
The guaranteed lender on the transaction is ABN Amro Bank, Chicago.