EDB invests US $91 million into Russian market of coal exports
Moscow, 28 August 2017. Eurasian Development Bank (EDB) will support the Russian market of coal exports, providing an investment loan to ‘TransFin-M’ PJSC (TransFin-M) to purchase BelAZ mining dump trucks. The loan amounting to US $91 million will be provided in the ruble equivalent for a period of 6 years.
As a result of the project implementation, TransFin-M will be able to provide full-cycle logistics services related to coal extraction and transportation from a coal mine to a railway station, which would reduce the costs of coal mine license holders owing to optimised use of the fleet.
At present, the contracting market is at its nascent stage of development: the number of contractors performing a full range of work at two or more mines is minimal due to the high entry barriers in the market. “Such barriers include the company’s expertise and its weight in the industry, as well as the amount of investments required. With the help of a leasing company, a license holder would be able to cut its costs by getting turnkey services – ‘from the quarry to the port’. In 2016-2017, TransFin-M purchased machinery of Belarusian make for a total amount of over RUB 6 billion. The company’s plans for 2017-2018 include additional purchases of BelAZ trucks to develop leasing of specialised machinery for coal mining companies,” notes Dmitry Zotov, General Director of TransFin-M.
“If implemented, the project will help meet the growing demand for Russian coal exports, with logistics costs kept under control. The project has an integration effect – BelAZ mining dump trucks are to be purchased, which will promote integration developments on the territory of the Eurasian Economic Union and strengthen economic ties between economic agents of the EDB member states,” comments Dmitry Pankin, Chairman of the EDB Management Board.
According to Dmitry Zotov, today, one of the key drivers of the 15-month growth in rail freight turnover in Russia is coal transportation. It accounts for 45% of the rail freight turnover. In addition, there are prerequisites remaining for further growth of Russian coal exports, primarily to the countries of the Asia-Pacific region.
Additional Information:
Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.
TransFin-M is one of the leading companies in Russia’s leasing market. It was founded in 2005 by Blagosostoyanie Pension Fund, one of the largest Russian non-governmental pension funds.
In 2016, the company’s new business, measured by the size of its leasing contracts, amounted to RUB 46.9 billion, while its total leasing portfolio exceeded RUB 277 billion.
Today, TransFin-M’s fleet includes over 58,000 freight cars and 131 passenger ones. Standard & Poor’s Ratings Services assigned its “B” international credit rating to TransFin-M, the outlook is “stable”, while ACRA assigned its “A-(RU)” credit rating to TransFin-M, the outlook is “stable”.
EDB Media Center:
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