Deutsche Bahn Secures €2 Billion Financing from EIB and HypoVereinsbank for Munich S-Bahn Expansion

Deutsche Bahn Secures €2 Billion Financing from EIB and HypoVereinsbank for Munich S-Bahn Expansion

(IN BRIEF) The European Investment Bank (EIB) and UniCredit’s HypoVereinsbank are jointly providing credit lines exceeding €2 billion to support Deutsche Bahn in acquiring 90 new trains for the Munich S-Bahn. The financing is channeled through Bayerische Eisenbahngesellschaft (BEG) on behalf of the Bavarian Ministry of Transport. The first walk-through and modern S-Bahn trains, expected to serve passengers from late 2028, will enhance capacity, comfort, and passenger information systems. The initiative aims to accommodate passenger growth and promote a shift from road traffic to rail for sustainable mobility. The financing structure involves a leasing approach through LHI Leasing GmbH, with loans transferred to special purpose vehicles (SPVs) secured by a debt service guarantee from the state of Bavaria. This investment signifies a significant step towards modernizing rail infrastructure and fostering greener transportation solutions in the Munich region.

(PRESS RELEASE) LUXEMBOURG, 4-Aug-2023 — /EuropaWire/ — The European Investment Bank (EIB), the lending arm of the European Union, and the German affiliate of UniCredit, HypoVereinsbank, have jointly committed to provide credit lines exceeding €2 billion to support Deutsche Bahn in procuring 90 new trains for the Munich S-Bahn. The financing for the new vehicles will be channeled through Bayerische Eisenbahngesellschaft (BEG), which oversees regional and S-Bahn traffic in Bavaria on behalf of the Bavarian Ministry of Transport.

BEG, in a competitive tendering process, selected LHI Leasing, based in Pullach near Munich, as the lessor, along with EIB and UniCredit as the investors, to finance the train purchase. The Free State of Bavaria has played a crucial role in enabling highly favorable financing conditions through a capital service guarantee.

Deutsche Bahn AG will utilize the funding to procure 90 new S-Bahn trains manufactured by Siemens Mobility. These state-of-the-art, fully walk-through trains, spanning 200 meters in length, are scheduled to commence passenger service in late 2028. Equipped with modern passenger information systems, the trains boast enhanced comfort and have a capacity to accommodate up to 1,841 passengers each. The increased capacity will facilitate passenger growth in the years to come and support the transition from road traffic to rail, promoting sustainable mobility.

The financing structure, devised by LHI Leasing GmbH, involves the transfer of loans to special purpose vehicles (SPVs), which are secured by a debt service guarantee from the state of Bavaria. This innovative approach ensures a secure and efficient financing process for the new train procurement.

The collaboration between EIB, HypoVereinsbank, and Deutsche Bahn signifies a significant investment in modernizing rail infrastructure and advancing sustainable transportation solutions in the Munich region. The new trains’ introduction is expected to enhance the overall passenger experience, boost regional mobility, and contribute to a greener future for Bavaria’s transportation network.

“We are delighted to support the modernisation of public transport in the metropolitan Munich area,” says EIB Vice-President Ambroise Fayolle, who is responsible for financing in Germany. “Appealing regional transport solutions are key to fostering the transition to climate-friendly mobility by encouraging commuters to switch from road to rail. This also helps cut the CO₂ emissions and traffic congestion caused by the use of private cars.”

“Our participation in the financing of modern S-Bahn trains in Munich is in line with our strategy: “We are actively involved in the sustainable transformation of society and support the local communities in Europe as a banking partner in their development,” says Christian Reusch, member of the Management Board of HypoVereinsbank. responsible for client solutions.

“The funding is one of the largest in this area. It shows what sets us apart as a bank: as a pan-European institution, we are able to offer an innovative financing solution of this size. At the same time, we are deeply rooted in the regions where our customers are based – in this case the Munich region and the Free State of Bavaria,” adds Jan Kupfer, Corporate Customers Director at HypoVereinsbank.

“The lease financing of the new Munich S-Bahn trains is perfectly in line with our purpose: supporting the expansion of sustainable mobility. We are very happy to be able to make a corresponding contribution with this high-volume transaction and to actively use the resource-saving vehicles on our doorstep in the future,” said Head of Structured Finance/Rolling Stock at LHI Stefan Wildgruber.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It makes long-term finance available for sound investment in order to further EU policy goals. The EIB’s key priorities are climate and the environment, development, innovation and skills, small and medium-sized businesses, infrastructure and cohesion. It works closely with other EU institutions to foster European integration, promote the European Union’s development and support EU policies in more than 140 countries worldwide.

HypoVereinsbank is part of UniCredit, a pan-European commercial bank with a unique service offering in Italy, Germany, and Central and Eastern Europe. Its group-wide purpose is to empower communities to progress, delivering best-in-class services to all stakeholders, unlocking the potential of its customers and its people across Europe. It serves over 15 million customers worldwide. They are at the heart of what it does in all of its markets. UniCredit is organised into four core regions and two product factories: Corporate Solutions and Individual Solutions. This enables the group to work in close proximity to its customers, leveraging its scale to develop and offer the best products across all of its markets. Digitalisation and its commitment to environmental, social and governance principles are key service enablers. They help it deliver excellence to stakeholders and create a sustainable future for its customers, communities and people.

The LHI Group consists of LHI Holding GmbH and LHI Leasing GmbH, which was founded in 1973, and their subsidiaries. The product portfolio ranges from the design of structured finance for companies, real estate management and asset management services to the conception of investment products in the asset classes of real estate, renewable energy and aviation. The target group for the investment offer is primarily professional and semi-professional investors. In total, the LHI Group manages a portfolio of over €14 billion. The company headquarters are located in Pullach, near Munich, with international representation in Poland and Luxembourg. The group employs more than 270 people.

Since the 1996 railway reform, regional and S-Bahn suburban rail transport in Germany has been the responsibility of the individual state governments. The state of Bavaria delegates this task to Bayerische Eisenbahngesellschaft (BEG), which plans, finances and manages regional passenger rail transport. As a state public service, it receives financial subsidies from taxpayers’ money transferred from the German federal government to the states. To use these state funds efficiently and offer the best possible service to passengers, Bayerische Eisenbahngesellschaft conducts Europe-wide tender procedures for its transport services contracts. The contract is awarded to the transport company with the best tender in terms of both quality and price.

Media contacts:

press@eib.org
+352 4379 – 21000

Donata Riedel
d.riedel@eib.org
+352 4379 – 86192

SOURCE: European Investment Bank