As a railway expert working for the World Bank, I engage with many client countries that are looking to expand or upgrade their railway systems. Whenever someone pitches a railway investment, my first question is always, “What are your trains going to carry?” I ask this question because it is fundamental to railway financing.
Railways are very capital intensive and increasingly need to attract financing from the private sector to be successful. That is why the World Bank recently updated its Railway Toolkit to include more information and case studies on railway financing. Here, in a nutshell are the key lessons about railway financing from this update.
Financing is the process of converting future cash flows into money that can be used for investment now. Let’s look at a typical railway investment project. The project requires a big investment up-front. Over time, the project has revenues and operation and maintenance costs. — blog.wb.org/blogs