Centered in Erie, Pennsylvania, Wabtec Corporation is dedicated to helping provide modernized infrastructure in sub-Saharan Africa. In 2004, Wabtec was formed with the merger of WABCO and MotivePower. This brought together two domestic railroad giants, known for a multitude of transportation technologies including the automatic air brake system, AB freight brake equipment, and electro-pneumatic brakes. In 2015, Faiveley Transport, one of the leading European locomotive businesses, integrated with Wabtec, making Wabtec Corporation one of the world’s largest public rail equipment companies. With nearly two and a half centuries of history in the rail industry, Wabtec Corporation continues to make strides forward, most notably through their recent merger with General Electric in February 2019.
Looking to help modernize transportation equipment in developing countries, Wabtec began seeking after exporting opportunities in sub-Saharan Africa. However, international transactions offer quite a few risks and challenges for U.S. based companies. For example, most international distributers often expect to buy on open credit terms; this means that buyers may take upwards of ninety days to pay for the products they receive. Global customers, especially in risker countries, do not always pay “on time” for the products they buy. This hurts the U.S. business’s cash flow and thus limits their working capitals. Domestic lenders often to do not insure against nonpayment for foreign receivables in certain parts of the world. Realizing this, Wabtec Corporation looked to EXIM.
EXIM can assist companies by guaranteeing financing to creditworthy foreign buyers in both private and public sectors. With EXIM’s loan guarantees, buyers are able to obtain competitive term financing from lenders when it is otherwise unavailable or when there are no economically viable interest rates on terms of more than one year. Wabtec used two EXIM medium-term loan guarantees totaling $13 million to help manufacture the locomotives in its Erie facility. Exporters such as Wabtec receive payment at the time of shipment, and with this payment guarantee, U.S.-based companies have greater ability to compete for sales in new markets worldwide.
With the support of EXIM, Wabtec Corporation will sell four diesel-electric locomotives to Cameroon Railways (Camrail) in Cameroon. The company received loans from Standard Chartered Bank in New York for the purchase of the four C30ACi locomotives. EXIM guaranteed the loan for the borrower (Cameroon’s Ministry of Economy, Planning, and Regional Development). The locomotives will be used on passenger trains as part of Camrail’s fleet renewal and modernization plan. EXIM’s lender loan guarantees are not only helping support U.S. exports and American jobs, but they are also helping modernize Cameroon’s railway service. The former Cameroon national Railway was privatized to Camrail in 1999. Camrail, which is majority privately owned, owns all rolling stock and is responsible for overseeing all freight and passenger operations and freight-rail investments. The Cameroonian government has responsibility for investments related to passenger rail.