Hyundai Rotem, Hana Bank to promote private railway project

Hyundai Rotem Co., a South Korean railway system maker under Hyundai Motor Group, announced on Monday that it has signed an infrastructure fund investment deal with Hana Bank. The contract aims to invest in the construction and development of social overhead capital projects, including railways, airports and roads.

The newly-created infrastructure fund will invest in future strategic sectors such as SOC construction, hydrogen operations and ESG projects. The fund will be managed using a capital call approach, initially raising part of the investment and collecting additional capital as demand increases. Hyundai Rotem and Hana Bank will participate in the fund, with Hana Alternative Asset Management overseeing its operations.

Recently, the government has allowed the private sector to propose new railway projects in response to the growing demand for high-speed railways, general railways and trams in metropolitan and regional areas. This enables private companies to suggest new route construction, improvements to existing railway facilities and innovative ideas for extending and establishing new branch lines. Consequently, private investment in railways is expected to expand.

Hyundai Rotem previously signed a memorandum of understanding (MOU) with Hana Bank on April 28 to jointly promote private railway investment projects and establish a strategic partnership in this area.

Under the agreement, Hyundai Rotem will participate as a representative company in the manufacturing of railway cars and operation of railway systems, while Hana Bank will serve as a financial and business manager for private railway investment projects, jointly promoting these ventures.

Write to Sung-Soo Bae at baebae@hankyung.com