Rail electrification ripe for ‘green investment’

The electrification of Britain’s railways could be a prime candidate for ‘green investment’ from the global financial market.

That’s according to Stephenson Harwood, which points to a range of infrastructure managers, train operating companies and rolling stock owners that have already benefited from a rising trend among institutional investors to fund sustainable or low-carbon projects.

According to Stephenson Harwood’s recently published brochure Green shoots: the rise of the green finance revolution, rolling stock leasing companies Eversholt and Porterbrook have both issued green bonds to invest in new, upgraded and more energy-efficient fleets.

Meanwhile, Italian open access high-speed train operator Italo signed a 1.1 billion euro syndicated loan in November 2019, which is believed to be the largest green loan in the transport sector to date.

National Grid has also benefited from green finance, the proceeds from which it intends to use towards financing clean transport infrastructure such as rail electrification.

RSSB and the Campaign for Better Transport have also both published reports calling for the Government to set out enabling policies that would lead to the injection of more sustainability-led finance into the rail industry.

Stephenson Harwood Partner Tammy Samuel and senior associate Kulraj Badhesha, who co-wrote the brochure, said: “Electrification of railway lines has been on NR’s agenda for some time. Given the big upfront costs associated with electrification, coupled with the fact that electric tracks are faster and greener, this area is a prime candidate for future green investment.”

They add that the outcome of the yet-to-be published

Williams Review may also have some bearing, should it make recommendations that help to enable and incentivise the rail network’s route to net zero carbon.