Rail First Asset Management has been awarded Australia’s first freight Green Loan accreditation for a $125 million tranche, recognising the energy efficiency of rail transport.
The loan is aligned with the Loan Market Association’s (LMA) green loan principles and issued under the ‘clean transportation’ category.
Rail First is Australia’s leading provider of full-service integrated rolling stock leasing and maintenance solutions and owns the nation’s third largest intermodal fleet, which includes more than 1200 wagons. It is Australia’s only local manufacturer of intermodal wagons and is not used to transport fossil fuels.
The company operates over 1300 locomotives and wagons with two strategically located workshops in Islington (South Australia) and Goulburn (New South Wales) which service a blue-chip customer base that is primarily focused on the intermodal market.
The Green Loan will fund Rail First’s ESG commitments, including the acquisition, upgrade and maintenance of intermodal wagons that have zero direct tailpipe carbon emissions. These initiatives further support the decarbonisation of Australia’s transport sector, which currently accounts for about 20% of the nation’s greenhouse gas emissions.
Rail freight is one of the most energy efficient forms of transport, producing 16 times less carbon pollution for every tonne-km travelled compared to road freight and significantly reducing crash costs. The Green Loan is intended to meet the United Nations’ Sustainable Development Goals 9 and 13.
As part of its Green Loan requirements, Rail First will report annually on relevant impact metrics including the estimated CO2 emissions avoided or reduced through the operation of its intermodal wagon fleet.
Rail First chief executive, Mark Kirkpatrick, said the industry-first accreditation reflects the ongoing sustainability improvements to the company’s assets and operations, further supporting customers as they work to reduce their carbon emissions.
“We are incredibly proud of our Australian manufacturing capability, using sustainably sourced materials and local labour to offer the highest quality intermodal wagons, maintenance, and solutions to the Australian rail industry,” he said.
The accreditation follows Rail First’s acquisition by experienced infrastructure investors Amber Infrastructure and DIF Capital Partners in September.
Amber Infrastructure’s Head of Asia-Pacific, Vaughan Wallace, said Rail First’s strong ESG credentials were a key reason for the attraction to the business, aligning with Amber’s responsible investment philosophy.
“Rail is well-placed to benefit from government decarbonisation initiatives with significant environmental and cost advantages over road transportation. Rail First’s domestic wagon manufacturing capability facilitates job creation, sustainable sourcing of raw materials, and end-of-life waste reduction. It also reduces unnecessary emissions from the transport of built wagons to Australia,” he said.
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