GE Transportation and PJSC Ukrzaliznytsia have signed a 15-year framework agreement worth about $1 billion on partnership in the renewal and modernization of traction rolling stock.

"Its first stage envisages the delivery in the end of 2018 and the first quarter of 2019 of 30 GE TE33A diesel locomotives with a localization level of 10%," reads a press release of Ukrzaliznytsia.

Production of locomotives will start in early 2018 in the United States, and first deliveries are scheduled for this fall.

GE and Ukreximbank also signed a purchase and sale agreement estimated at $140 million (including VAT) for the delivery of the first 30 diesel locomotives. The state bank will then transfer diesel locomotives to Ukrzaliznytsia under the terms of financial leasing.

Ukreximbank board chairman Oleksandr Hrytsenko explained that the contract was signed under the guarantees of Citigroup.

The framework agreement stipulates that with time the localization level will be brought up to 40%, the volume of GE locomotives of the specified Evolution series until 2034 will reach 225. As part of the agreement, Ukraine should create a base for the long-term maintenance of GE diesel locomotives and modernize 75 locomotives from the current park of Ukrzaliznytsia.

"This is a very important day for us, for the development of business and transport infrastructure," Ukrainian President Petro Poroshenko, who was present during the signing of the documents, said.