The Heidekrautbahn railway will be improved, modernised and expanded
Heidekrautbahn is a regional railway line in Berlin and Brandenburg, Germany, operated by Niederbarnimer Eisenbahn (NEB). It is an important transport service for the residents of the region. In the upcoming years, NEB will reactivate the trunk line of the Heidekrautbahn network. The trunk line that runs from northern Berlin to the beautiful Schorfheide region in Brandenburg will finally be restored to its full length after it was severely damaged in the Second World War and completely severed when the Berlin Wall was built in 1961. Eight new stations from Berlin-Wilhelmsruh to Basdorf in Brandenburg will be opened to passenger services in 2024. In addition, the diesel trains currently in use will be replaced by seven low-noise and emission-free regional trains with hydrogen fuel cell drives. The upgrade and expansion of the Heidekrautbahn network is part of a broader effort to improve the transport infrastructure in the region.
Attractive, environmentally friendly, and climate-neutral
The state-of-the-art and innovative Mireo Plus H trains from Siemens Mobility are partly manufactured in Germany. Equipped with a fuel cell drive and a lithium-ion battery, the second-generation hydrogen trains will provide completely CO2 emission-free transport. They will serve commuters in the surrounding area and bring leisure travellers to popular destinations - not only faster and cleaner than ever before, but also in a climate-neutral way.
Hydrogen or fuel cell technology is playing a key role due to the existing renewable energy supply in the Brandenburg region. To produce the required green hydrogen locally, a hydrogen plant is being built near the Heidekrautbahn railway. The electricity required will be generated entirely within the region from wind and solar energy. It is a joint project: project developer ENERTRAG is responsible for the construction of the hydrogen plant, part of the regional, sustainable hydrogen infrastructure. NEB will commission the hydrogen-powered trains on the Heidekrautbahn railway line and Kreiswerke Barnim will construct an H2 train filling station, the other part of the hydrogen infrastructure, which will supply hydrogen exactly where it is needed.
Operating the new trains throughout the Heidekrautbahn network will save around 1.1 million litres of diesel per year, equivalent to potential savings of around 3310 tonnes of CO2 or the CO2 absorbed by 120,000 trees when green hydrogen is used.
The upgrade and expansion of the Heidekrautbahn will benefit the region’s residents for many years to come and serve as a model for similar projects throughout Germany and beyond, both by offering a green transport alternative and for the innovative financing solution used.
Financing: a challenge
For a bank, pure asset-based finance - financing based solely on the value of trains as a credit risk - is not yet possible for hydrogen trains. The technical risks and the currently limited market for these types of trains would make financing too costly. Borrowing from public budgets is also prohibitive because it would increase debt. Even traditional Public Private Partnership (PPP) financing would entail high financing costs, emphasising the challenge for overall financing to secure low borrowing costs over a long period.
Solution: division of tasks and cooperation between all parties involved
The funds for the overall project consisted of grants from federal and state funds as well as loan financing for the trains worth EUR 60 million financed by KfW IPEX-Bank.
The complexity of the project and the various interests of the parties involved required a modern and intelligent architecture for the overall project, the so-called mobility owner concept. The relationships between the various partners are crucial here. Financing within this structure reconciles the interests of all parties involved: manufacturer, buyer, asset owner, operator and financiers.
• The asset owner is a project company of Deutsche Anlagen-Leasing (DAL). It limits its functions to ownership, rental and financing. The financing covers the entire project term, from the approximately two-year construction period to the end of the 25-year operating period.
• NEB, as the operator, focuses on running the trains for the term of the initial 10-year transport contract, and pays leasing instalments to the project company.
• The states of Berlin and Brandenburg, as transport authorities, award the transport contract and assign parts of the grant payments to the project company. At the same time, they secure the continued use of the trains for a further 15 years and make a commitment to their subsequent use.
• KfW IPEX-Bank purchases the assigned grant payments and thus finances the trains at favourable conditions over the entire term.
• The manufacturer Siemens Mobility has security regarding payment of the purchase price instalments due.
The key factor in this mobility owner concept is that every participant specialises in their core tasks. The advantages are clear: financing security; favourable conditions in line with municipal needs; and the greatest possible transparency for the transport authorities while securing investments in the long term, in this case, in hydrogen trains.
New architecture for innovative mobility
The challenges of the transport transition must be overcome with new technology. Due to the complexity and multidimensional nature of such projects, it makes sense to share the tasks with several partners and in a structure that meets the requirements of all parties involved.
This is where KfW IPEX-Bank contributes its distinct know-how and in-depth market expertise in the transport sector. In principle, the mobility owner concept can be applied in all public-sector investment in public services. The new Heidekrautbahn project, with all its participants, provides an excellent example and master plan to achieve this.
