Britain grants $ 2.3 billion to Bombardier Rail to finance its exports
The British government has given Bombardier’s rail unit $ 2.3 billion in export financing, which will support an English factory ahead of its imminent merger with French train maker Alstom.
Bombardier said the funds will be invested in the Derby plant after securing a $ 2.9 billion train construction contract for new monorail lines in Cairo, Bloomberg reported.
The grant will directly support nearly 100 jobs at the 2,000-person plant.
Following Brexit, Britain is expanding the role of UK Export Finance (UKEF) to promote global trade ties.
UKEF also recently provided loans to British Airways and EasyJet.
The Egyptian deal will mark the first export of trains built in the UK in over 12 years.
It will also improve the Litchurch Lane plant before Alstom’s takeover of Berlin-based Bombardier Transportation.
According to the French company, whose last British railway plant closed in 2004, the acquisition will close on January 29.
Under the Bombardier deal, UKEF is providing 80% of the loans, which will amount to 2.5 billion euros, from JPMorgan Chase & Co. and other lenders.
UKEF spokesman Robert Maccabe told Bloomberg that export credit is usual for such projects and private access to such finance would have been difficult for the company.
He also revealed that the terms of the deal called for a stipulated amount of British content on the trains.
Spokesman Will Tanner told Bloomberg that around 1,000 railcars are expected to be built at the Derby plant this year. The project will continue until next year, not counting the monorail contract.