Ashurst advises on rolling stock financing for East Brandenburg network

Ashurst advised a consortium comprising European Investment Bank, KfW IPEX-Bank and Norddeutsche Landesbank – Girozentrale on the financing of new rolling stock for the operation of rail passenger services on the East Brandenburg network by Niederbarnimer Betriebsgesellschaft mbH (NEB) with a volume of approx. €170m.

The consortium is providing the financing for the acquisition of 31 new single deck battery-powered electric railcars of the type Mireo Plus B manufactured by Siemens Mobility GmbH. The railcars are the first battery-powered trains on the routes of the East Brandenburg network. The trains use the overhead contact lines on the electrified route sections also to charge their battery, allowing them to continue their journey on the non-electrified sections. Unlike the previously used diesel engines, they hence avoid air pollution and will run completely CO2-free as soon as the railway’s electricity is generated entirely from renewable energy sources. The railcars will be made available by Alpha Trains NOB S.à r.l. in a leasing structure to NEB for the operation on the regional transport routes of the East Brandenburg network. The rail project is one of the first to meet both the climate and sustainability targets of the EU funding bank in full.

Alpha Trains is a special purpose vehicle of the Alpha Trains Group, a leasing company specialising in the financing of rail vehicles, which also provides equity.

NEB was awarded the contract for operating regional rail passenger transport for the lines of the network on 2 June 2021 by the responsible authorities, the German Federal State of Brandenburg and the City of Berlin. The underlying transport agreement has a term until the end of 2036 with a planned start of operations in December 2024.

The complex debt financing of both phases – the construction and operation phase – by the consortium is provided by means of several debt capital instruments, including term loans, receivables purchase agreements and interim financings for subsidies, and is bundled at the documentation level in a framework agreement.

Ashurst provided comprehensive advice to the consortium on banking and capital markets law, tax law as well as transport / public law. The Ashurst team was led by partner Derk Opitz. He was assisted by partner Dr Tobias Krug, senior associate Alexandra Heitmann, associate Dr Jan Ulrich Heinemann, senior transaction lawyer Kerstin Hartmann (all Project Finance, Frankfurt), transaction lawyer Ariana Fazlic (Project Finance, Munich) as well as partner Dr Anders Kraft (Tax, Frankfurt). Counsel Holger Mlynek and associate Dr Simon Groneberg (both Infrastructure, Frankfurt) advised on the transport agreement and the rolling stock related contracts.

From the Luxembourg office, the banking team led by partner Fabien Debroise was involved, comprising senior associate Katia Fettes and associate Ludmilla Bouchez-Lecuy. Advice on tax law aspects was provided by partner Georges Simon and counsel Chiara Bardini.

Ashurst’s German project finance practice regularly advises on asset finance transactions in the context of regional rail passenger transport financings.

/Public Release.