European Commission approves Belgian loan for rail freight company Lineas
On Monday, the European Commission announced that it had approved an emergency loan of 61 million euros from Belgium to the private rail freight operator Lineas. According to the EU’s competition authority, the measure complies with European state aid rules.
The federal government authorised the loan as part of the summer Budget agreement. Lineas, Europe’s largest private rail freight operator, has encountered financial difficulties due to an unexpected downturn in demand from the steel, chemicals and automotive sectors. The 61 million euro loan is intended to cover the company’s short-term liquidity requirements.
In a press release, the Commission stated that the conditions and temporary nature of the loan agreement are compatible with EU state aid regulations. State aid refers to any direct or indirect economic or financial support granted by public authorities to companies, and it can only be provided under the strict conditions set out in European legislation.
The European Commission is responsible for overseeing state aid, ensuring that such measures do not discriminate between companies and do not distort competition within the internal market.
In its assessment, the Commission took into account the importance of rail freight as a low-emission alternative to road transport. Should the loan not be repaid, Belgium has committed to submitting a restructuring plan.
Following a complaint, the Commission examined two earlier capital injections into Lineas, including contributions from the Federal Participation and Investment Company (FPIM), the federal investment vehicle. It concluded that these measures did not constitute state aid.
Lineas, headquartered in Belgium, is the largest private rail freight operator in Europe, with operations in Germany, France and the Netherlands. Its shareholders are FPIM and the private equity firm Argos Wityu. Specialising in rail-based freight transport, the company aims to promote a “modal shift” in Europe by moving goods transport from road to rail.
Since February 2020, Lineas has been a member of the European Rail Freight Association (ERFA), a coalition that seeks to contribute to the development of a fully liberalised and competitive European rail freight market.
© BELGA PHOTO JONAS ROOSENS