UK grants $2.3bn to Bombardier rail in export funding

21 January 2021 (Last Updated January 21st, 2021 12:01)

The UK Government has granted $2.3bn to Bombardier’s train unit in export funding, which will support an English plant ahead of its pending merger with French train manufacturer Alstom.

UK grants $2.3bn to Bombardier rail in export funding
As a result of Brexit, Britain is expanding the role of the U.K. Export Finance (UKEF) to promote global trade links. Credit: Sandra Ahn Mode/Unsplash.

The UK Government has granted $2.3bn to Bombardier’s train unit in export funding, which will support an English plant ahead of its pending merger with French train manufacturer Alstom.

Bombardier stated that the funds will be invested in the factory in Derby after securing a $2.9bn train construction contract for new monorail lines in Cairo, reported Bloomberg.

The grant will directly support nearly 100 jobs at the 2,000-strong plant.

As a result of Brexit, Britain is expanding the role of the UK Export Finance (UKEF) to promote global trade links.

UKEF also recently provided loans to British Airways and EasyJet.

The Egyptian deal will mark the first export of UK-built trains in more than 12 years.

It will also enhance the Litchurch Lane plant prior to the Alstom buyout of Berlin-based Bombardier Transportation.

According to the French company, whose last UK train factory closed down in 2004, the acquisition will conclude on 29 January.

Under the Bombardier deal, UKEF is assuring 80% of borrowing, which will amount to €2.5bn, from JPMorgan Chase & Co. and other lenders.

UKEF spokesperson Robert Maccabe informed Bloomberg that export credit is customary for such projects and privately accessing such funding would have been difficult for the firm.

He also revealed that the terms of the deal needed a stipulated amount of British content in the trains.

Spokesman Will Tanner told Bloomberg that around 1,000 rail cars are expected to be built at the Derby plant this year. The project will see it through to next year, discounting the monorail contract.