abrdn Core Infrastructure and Rock Rail announce transaction and partnership with Alstom in Germany

abrdn Core Infrastructure, Rock Rail and Alstom have delivered their second European investment together, with the successful closing of a sale and leaseback transaction of 31 new 6-car Talent 3 Plus electric powered trains. These units are for the Baden-Württemberg and Saale-Thuringia-Südharz (“STS”) networks in Germany.

The Talent fleets are well-established and a popular product in Germany with a track record of delivering a reliable and high-quality passenger experience since the 1990s. The Talent 3 Plus is the latest and most-advanced evolution of the product range.

The Talent 3 Plus is fully electric and has a maximum speed of 160 km/h that enables fast train travel and is state-of-the-art for regional transportation. The trains will be fitted with European Train Control System (“ETCS”) Level 2, which increases safety and efficiency on the network.

The fleet has a sliding step and Passenger with Reduced Mobility functionality (“PRM”), which includes a PRM-accessible toilet and a built-in ramp lift to aid boarding. The fire safety category “B” allows operations in tunnels of any length.

Strengthening abrdn’s presence in the German rolling stock market, this investment also contributes to the country’s ambitious environmental targets and is the sixth deal that abrdn and Rock Rail have closed together since partnering ten years ago.

This also marks the seventh investment by abrdn’s third Core Infrastructure Fund, ASCI III, which is currently fundraising and investing in the pan-European infrastructure mid-market and is categorised Article 8 under SFDR.

Nick Flynn, Investment Director, abrdn, said: “This represents the sixth major investment in passenger trains for the abrdn Core Infrastructure team, where we have raised over €3.5 billion of new investment into UK and European rail infrastructure, improving the environmental credentials of rail travel  and delivering a higher quality passenger experience. We are committed to delivering safe and reliable essential infrastructure to local communities and we appreciate all the parties’ involvements and efforts in successfully reaching financial close.”

Henry Swindell, Investment Director, Rock Rail, added: “We are pleased to announce our fourth major rolling stock acquisition in Germany. The transaction is further proof of the continued recovery in the transport sector, which has seen disruption and change aplenty in recent years. The trains are already making a difference, delivering flexibility to service operations and a step change in the passenger experience. Now begins the hard work to bring the remaining trains into service at a high-performance level.”

Christoph Klaes, Vice President Customer Management, Alstom, said: “We are delighted that Rock Rail and abrdn have opted for the Talent 3 Plus. The trains provide a state-of-the-art passenger experience, a high level of comfort and ample capacity for the growing demand for sustainable transport in Baden-Wuerttemberg. Thanks to Alstom’s ETCS solution, the fleet will be well-equipped for the ongoing digitalisation of rail traffic.”

Further Information

The fleet, consisting of 31 x 6-car electric units are already built and will support the rollout of ETCS, a new trackside signalling software, across networks in Central and Western Germany. Upon financial close, 28 units were sub-leased to the state-owned vehicle pool “SFBW” in Baden-Württemberg (BaWü), with the remaining three trains sub-leased to Abellio on the STS franchise in central Germany.

The State of Baden-Württemberg is delivering numerous rail infrastructure projects that will support the region’s targets to reduce carbon emissions and double rail passenger demand. Stuttgart, the region’s largest city, is getting a new, underground main station to replace its old ground-level terminus – the €10bn+ project is flanked by the project Digitaler Knoten Stuttgart (DKS), which rolls out ETCS Level 2 in the whole Stuttgart rail node increasing the capacity of the existing infrastructure. The Talent 3 Plus units are joining a complementary, anchor fleet of Talent 3 trains and their ETCS-capability will match the train to the infrastructure.

The STS network is operated by Abellio Rail Mitteldeutschland and has experienced significant growth in passenger numbers since the introduction of Deutschlandticket, a German-wide regional train ticket for 49 euro per month. The Talent 3 Plus units supplement a large fleet of Talent trains leased to Abellio and are delivering additional capacity to the RB 25 line between Halle and Saalfeld.

ETCS

ETCS is state-of-the-art signalling technology – it is a standardised, transnational railway safety system that is already used in many European countries. It works by sending radio transmitted signals directly to the drivers’ cab rather than relying on light signals installed trackside. The system improves train control by allowing trains to run at shorter intervals and increases safety by automatically braking trains if they are travelling too fast or too close together.

Alstom is a global leader in the modernisation of railway systems and has developed an ETCS Level 2 system that is helping to increase rail transport capacity on existing lines, reduce maintenance costs and maximising safety.

ETCS is also coming to the UK. In November 2023, Rock Rail and abrdn’s Class 717 EMUs operating under ETCS Level 2 signalling carried Great Northern commuters to the City of London. Siemens Mobility supplied the signalling equipment for the first of its kind project, which is a vital pathfinder for the digital signalling masterplan across the UK network.

abrdn and Rock Rail have invested in several rolling stock infrastructure projects starting with the financing of Rock Rail Moorgate (2016), followed by Rock Rail East Anglia (2016), Rock Rail South Western (2017), Rock Rail West Coast (2019), and Rock Rail Main-Weser (2022), developing successful partnerships with public and private stakeholders to drive innovation and solutions in the transport sector across Europe.

Financial Advisor and Institutional Debt

Stifel acted as exclusive M&A and Debt advisor on the transaction. The debt package comprises an institutional tranche provided by Aviva, MetLife and Legal & General, and a bank loan provided by Barclays and SEB.

Ends 

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