In this week’s episode of our ‘Countdown to COP: Financing and Fuelling the Future’ podcast series, host Mhairi Main Garcia talks to Frederik Lorenzen, a Finance Partner based in our Frankfurt office. Mhairi and Frederik discuss rail, a sector that will play a key role in achieving net zero but which faces its own challenges. These include real and perceived issues around reliability, efficiency and, potentially, affordability if the sector is to reach its full potential in terms of sustainability. This will also require proactive and combined effort across the industry from manufacturers, developers, operators, lenders, regulators and governments at both domestic and regional levels.
Listen to our Rail episode on Apple or Spotify and access the transcript here.
Rail nevertheless represents a hugely attractive investment in terms of green financing, especially with the introduction of:
- the EU taxonomy, which next year will force banks to publish information regarding how much of their loan portfolio represents green loans; and
- the Luxembourg Protocol which creates a security interest over locomotives which is recognised by all member states that sign up, essentially providing more security and certainty to financiers.
Globally, countries that have little to no existing rail infrastructure also have a unique opportunity to create efficient and sustainable rail infrastructure from scratch, with its incredibly low in greenhouse gas emissions. However, arguably the most important step in achieving net zero in the rail sector is investment in and the improvement of existing rail infrastructure and this should be a key focus for industry participants in the immediate future.
Frederik is a Partner in the firm’s Assets and Structured Finance group based in Frankfurt and has been advising clients on transactions in the transport sector for close to two decades.
To discuss any aspect of this episode further, please do reach out to Mhairi Main Garcia, Frederik Lorenzen or your usual WFW contact. And to sign up to receive all forthcoming episodes of this podcast series, please click here.
