UIC joined ministers, members and partners at the annual World Bank and World Resources Institute conference, Transforming Transportation in Washington DC.
The theme this year “Mobilising Finance for Climate Action” aligned well with UIC’s strategic global advocacy work. UIC and its members ensured that rail was on the agenda at this global, high-level event and shared their latest findings on climate finance for railways.
UIC Director General, François Davenne took part in the “Climate Finance in Transport Roundtable: Pooling and Scaling Funding and Financing” organised by the World Bank and World Resources Institute. This discussion explored innovative financing models, examined legal frameworks and how to improve the eligibility of projects for funding. Davenne shared crucial insights from UIC’s groundbreaking study carried out in collaboration with the World Bank, Alstom, the University of Birmingham, and Roland Berger entitled “Bridging the Rail Finance Gap: Challenges and Opportunities for Low and Lower-Middle-Income Countries.”
Railway leaders from Columbia, India, Turkey and Spain highlighted their goals and successes to transform their transport systems through rail investment.
María Constanza García Alicastro, Deputy Minister of Infrastructure at the Ministry of Transport in Colombia, announced that railways were going to play an important role as an investment of 10 billion dollars would allow Columbia to advance and bring back railways to decarbonise logistics as well as help people in cities.
Srinivas Enamandram, Joint Secretary Logistics for Indian Railways, proudly shared how India was at the forefront of rail electrification, having one of the most electrified railways in the world. This reflects the vision of the Indian Prime Minister to deliver speed, skill and scale to upskill and develop the rail industry’s capacity, with a vision and determination to invest in infrastructure.
Enver İskurt, Turkish Deputy Minister of Transport and Infrastructure, highlighted that railways were their preferred mode of transport, providing good value for money as well as being environmentally friendly. He announced that 65% of Türkiye’s 2024 transport spending would go to railways, equivalent to around 30 million US dollars.
The impressive energy efficiency of modern trains in Spain was discussed in the special session on “Spain Going Green”. María Luisa Domínguez González, ADIF Strategic Plans and Projects Director and Advisor to the Board, shared the benefits of harnessing regenerative braking systems and the importance of linking this to active travel. She further presented how competition had been bringing prices down and supporting a clear modal shift to rail.
During the joint UIC and World Bank meeting, “Unlocking the Potential of Railways through Climate Finance”, the expert panel discussed how to unlock the estimated 300 billion US dollars of annual additional investment needed for the necessary improvement and expansion of rail networks.
Martha Lawrence, Senior Railway Specialist at the World Bank, presented the findings of the new World Bank report aimed at closing the finance gap and maximising the railway’s potential to combat climate change. The report, launched last week, explores some of the most promising solutions alongside the ability to increase financing for the sector, especially through mobilising private capital and tapping into climate-specific financing instruments such as climate funds, carbon finance and green bonds. The São Paulo Metro, India, and Cairo rail projects shared case studies and the resulting conclusions. Lucie Anderton, UIC Head of Sustainability and North America Coordinator, outlined the key recommendations from the UIC study.
“If low and lower-middle income countries grew the rail market share from the current 2% up to 8% (approx. the current global average) we could avoid a total of 1.8Gt of carbon emissions by 2050. Finance is the biggest hurdle in expanding, adapting, modernising and connecting the rail network in the poorest countries. Our study gives recommendations for increasing rail project investment in LICs and LMICs.
Governments can:
- Implement policies to encourage investment in rail by aligning with standardised technical specifications and incentivising a modal shift.
- Enable rail projects to benefit from carbon credits for reducing emissions, which could partially fund and de-risk infrastructure projects or rolling stock purchases.
- Use rail investment to rebuild and adapt infrastructure under Article 6 of the Paris Agreement as well as loss and damage funds.
International financial institutions (IFIs) can:
- Update cost benefit analysis methods for rail projects, prioritise low-carbon modes of transport, and target increasing finance allocated to rail.
- Work to de-risk rail projects and support LICs and LMICs with technical assistance.”
The global goals and aims for rail are constantly evolving and transport leaders are seeing new opportunities, however questions about finance still remain.
The Transforming Transportation conference therefore provided an opportunity for UIC via Philippe Lorand, UIC Director of Institutional Relations, to evaluate the progress made in the sector with the various IFIs and UIC partners who were in attendance. Bilateral meetings were held to discuss developments in each of the six UIC regions, each IFI’s action plan, and the possibility for further collaboration being reviewed between UIC and the institution in question.
UIC will continue to advocate for sustainable growth in rail and has started to explore relevant solutions while continuing to work with finance stakeholders to accelerate change.
