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MÁV-Trakció signs €79.6m loan for engines purchase

MÁV-Trakció, state-owned Hungarian railway company MÁV's traction unit, on Thursday signed for a €79.6 million loan from the European Investment Bank (EIB) and Germany's KfW IPEX Bank to pay for 25 Bombardier engines.

KfW IPEX is providing 52% of the loan and the EIB 48%. The first repayment of the 15-year loan is due in June 2013.

MÁV-Trakció will take delivery of the first Bombardier TRAXX engine in the first half of 2011 or as early as December 2010. The remaining engines will arrive within two years.

If MÁV-Trakció calls an option for another 25 TRAXX engines within seven months of the time it receives the advance financing for the engines in the first order - expected to arrive in the middle of January - it could save €200,000 on each of the €3,187,500 engines, MÁV-Trakció CEO Imre Markus said.

The TRAXX engines will replace some of MÁV-Trakció's 379 V43 electric engines built between 1963 and 1982, which have become expensive to maintain. (MTI-Econews)