The Brazilian National Bank for Economic and Social Development (BNDES) approved a financial support of BRL 500 million (USD 85.6 million) to VLI Multimodal to invest in the modernisation of tracks and rolling stock as well as construction of new facilities of the Centro-Atlântica Railway (FCA).
BRL 3.9 billion (USD 667.8 million) is the total estimated value of the project.
In the transaction, BTG Pactual Bank, BNDES and ABC Brasil Bank coordinated the issuance of BRL 1 billion (USD 171.2 million) in debentures and BNDES subscribed 50% of the amount, in a longer-term tranche.
With the funds, the concessionaire will expand and modernise seven facilities across the network. Under the project, VLI (Vale Logística Integrada) Multimodal will also replace tracks and sleepers to increase average speed and safety, will repair and install new guardrails on bridges and pedestrian crossings. The company will also improve the rolling stock will build an Industrial Effluent Treatment Plant at the Guará Integrator Terminal and make concession payments.
VLI Multimodal’s main activity is the provision of integrated freight transport services, operating through integrated logistics platforms, combining assets and services in railways, ports and terminals, to serve customers in the agribusiness, industrial and steel industries. In 2023, the company transported more than 43.8 billion tonne – kilometers by railways and moved more than 43 million tonnes through ports.
“Cargo logistics is fundamental to the country’s economy and managing the flow of goods and services involves all economic activities, influencing the competitiveness of companies. Logistics costs in Brazil are estimated at around 11% of GDP,” BNDES President Aloizio Mercadante said. He added that under the guidelines of the Government, “we will improve integrated and multimodal logistics, which plays a strategic role in the supply chain by combining different modes of transport.”
Centro-Atlântica Railway is controlled by VLI under a 30-year contract which will expire in August 2026. In 2024, the transport company announced that is seeking to extend the contract for another 3 decades for which it plans to invest BRL 24 billion (USD 4.2 billion) and disburse another BRL 5 billion (USD 856.2 million) in grants and compensations for returning certain rail segments. Around BRL 12 billion (USD 2 billion) would be used for track modernisation and expansion as well as the integration of the rail infrastructure into the urban areas, while the remaining will be used to renew and replace the rolling stock.
To renew rolling stock fleet, VLI and Wabtec signed in 2023 a BRL 200 million (USD 34.2 million) contract for the supply of nine Evolution Series locomotives (ES43BBI model) to transport cargo on the Ferrovia Centro-Atlântica. The heavy-haul locomotives are specifically designed for 1,000mm gauge railways in Brazil and is equipped with a powerful 12-cylinder, 4500-horsepower Evolution Series engine and eight powered axles designed to operate in country’s extreme environments.
The new locomotives provide increased capacity and efficiency while meeting transport demands on the Central-East corridor through which freight from the steel industry, agribusiness, coal, fertilizers, fuel, and cellulose are shipped towards the port system of Espírito Santo. These shipments include a 30-year contract signed with LD Cellulose to transport dissolving pulp. VLI will move 500,000 tonnes of material produced in the Triângulo Mineiro (which comprises the west part of the state of Minas Gerais, in Brazil) to the port of Barra do Riacho each year. For the LD Cellulose contract, the company invested BRL 400 million (USD 68.5 million) in wagons specially designed to transport dissolving pulp.
Centro-Atlântica Railway is a railway concessionaire that operates part of the privatised RFFSA network covering much of the Brazilian territory. Under the concession contract a a series of improvements and investments are planned with the aim of expanding and modernising the infrastructure and facilities. The railway has approximately 7,800 km of tracks and has the Centro-Leste, Centro-Sudeste, Minas-Bahia and Minas-Rio corridors. FCA rolling stock comprises around 27,000 wagons and 560 locomotives.
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