Siemens in deal with Russia's RDIF on $4.5 billion rail link
18 Feb 2019
Russian Direct Investment Fund (RDIF), the sovereign wealth fund of the Russian Federation, and Siemens Mobility, a unit of German engineering and technology giant Siemens AG, have signed an agreement to work together on a 300 billion rouble ($4.5 billion) high-speed rail link between the Russian cities of Chelyabinsk and Yekaterinburg, RDIF said on Friday.
Under the deal, signed on the sidelines of the Munich Security Conference, the German company will be a technology partner for the Chelyabinsk-Yekaterinburg rail project, RDIF said, adding that construction of the rail link will start in 2021.
A Siemens spokesman said the two sides had signed a non-binding memorandum of understanding in line with the German Economic Partnership Initiative for the Ural High Speed Transportation in Russia.
Siemens Mobility, a division of the German company Siemens AG, produces railway equipment and trains.
The funds will be used to construct a new double-track high-speed railway between the cities of Chelyabinsk and Yekaterinburg. The 220km long rail link would allow trains to travel at speeds of 300 km/h.
The project will be implemented within the framework of a concession agreement and will also include the construction of related infrastructure. This will include four railway stations (Balandino and Koltsovo airports, Snezhinsk and Sysert), 10 intermediate stations and station complexes, four traction substations, a depot for high-speed rolling stock and a control building for the rail link.
Construction of the railway line will begin in 2021 with commissioning scheduled for 2025.
“RDIF is one of Russia’s largest investors in the equity capital of infrastructure projects being recently implemented. Infrastructure investments account for more than 40% of the Fund’s portfolio, and we plan to continue to invest in this sector. The project to build a high-speed railway linking Yekaterinburg and Chelyabinsk, each with a population of more than one million, is of strategic importance not only for these regions, but also for the whole country. It will help create the third largest urban area in Russia with a population of four million people,” Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), noted in a press release.
“The formation of a consortium of partners is one of the key priorities in the preparation of the project to construct a high-speed railway between Chelyabinsk and Yekaterinburg,” Sergey Brevnov, CEO of the Economic Partnership Ural High-Speed Rail, said.
Russian Direct Investment Fund is Russia's sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Currently, RDIF has experience of the successful joint implementation of more than 70 projects with foreign partners totalling more than 1.4 trillion roubles and covering 95 per cent of the regions of the Russian Federation. RDIF portfolio companies employ more than 700,000 people, and generate revenues which equate to more than 5 per cent of Russia’s GDP.