Export Credit Rules Seek to Aid Rail Projects, Ease Road Congestion
New international rules adapting the Organization for Economic Cooperation and Development’s widely-accepted rules on export credits to the sector-specific financing conditions of new railway infrastructure projects took effect Jan. 1 for a four-year trial period, an OECD press release reports. The new framework is designed to meet the variable needs of public authorities and exporters in both advanced and emerging economies, the OECD states, while helping promote the use of rail as a viable alternative to road and air transportation and thereby reduce road traffic congestion and related carbon emissions.
According to the press release, for contracts involving an overall value of more than SDR 10 million ($15.3 million) the Rail Sector Understanding lengthens repayment terms to up to 12 years for transactions in high-income OECD countries (subject to conditions aimed at complementing the private sector) and up to 14 years for transactions in all other countries. The RSU is applicable to export contracts for essential rail infrastructure assets, including rail control, electrification, tracks, rolling stock, and related construction and engineering work.