Costa Rica inks deal for US$450mn electric freight railway

Costa Rica's state rail administrator INCOFER and the Central American Bank for Economic Integration (Cabei) signed an agreement on Monday to finance feasibility studies to build the Limonense electric freight rail line (TELCA).

The studies are expected to be completed in the last quarter of next year, so works can begin in the second half of 2020.

In a first stage, the project will modernize the existing 112km railway linking Río Frío, in Heredia province, to Limón. A 60km branch connecting Limón to Valle de la Estrella will also be converted into an electric rail line.

In a second stage, the line would be extended to Chilamate, also in Heredia province.

The investment required for the project is currently estimated at US$450mn, the Costa Rican government said in a release.

National power utility ICE will be tasked with installing the overhead wires.

The line will promote decarbonization, helping to reduce traffic congestion along the route 32 highway, and boosting the economy of the Atlantic region, according to authorities.

Once completed, the project will form part of a logistics corridor that will link the Bajos de Chilamate region to the US$1bn container terminal that APM Terminals built in Moín, as well as docks operated by the Atlantic coast port authority Japdeva.

The railroad is one of the projects Japdeva is considering financing with the concession fees that APM Terminals is set to pay for operating the terminal.