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• Traxport Rail Services: Gas-Powered Freight Rail On The Lagos–Kano Corridor

INVESTMENT OPPORTUNITY

Traxport Rail Services: Gas-Powered Freight Rail On The Lagos–Kano Corridor

Nigeria moves over 80% of its cargo by road. On paper, that sounds manageable.

In practice, it means deteriorating highways, port delays of 10 or more days in Lagos, chronic fuel costs, cargo theft, and a logistics bottleneck that inflates prices and stifles industrial growth across the country. With only 31% of roads paved, the challenges are structural and deepening.

Traxport Rail Services (TRS) is proposing a fundamentally different approach.

What Traxport Is Building

Traxport Rail Services is a Special Purpose Vehicle (SPV) created to develop and operate a gas-powered freight rail network along Nigeria's 1,126 km Lagos–Kano corridor - one of the country's busiest commercial routes. Using LNG/LPG dual-fuel locomotives, the network is designed to move containerised and bulk freight reliably between Lagos and Kano, with intermediate stops determined by customer demand.

The company has already secured a 35-year rail access agreement with the Nigerian Railway Corporation (NRC), completed a feasibility study through KPMG, and appointed the Bank of Industry (BOI) and Cordros as mandated lead advisers to raise equity and debt financing. Technical discussions are ongoing with CRRC (China), ABC (Belgium), Future Resources (Belgium), and Vecturis, who will serve as technical operators of the line.

Why Rail, Why Now

The timing is deliberate. Nigeria's Energy Transition Plan targets net-zero by 2060 and explicitly positions gas as a bridge fuel. Post-COVID demand for intermodal logistics has grown. The government is pushing public-private partnerships for rail rehabilitation. And rising diesel prices are making road haulage increasingly untenable for bulk shippers.

For companies like Dangote, BUA Group, Flour Mills of Nigeria, Olam, Tolaram, TGI, and Arewa Cotton - all of which Traxport is targeting for offtake contracts, the economics of switching to rail are becoming harder to ignore.

The Business Model

Traxport plans to price its freight rates 30 - 40% below current road transport costs, charging a fixed tariff per ton-kilometre based on volume and distance. The company projects it will transport over one million tonnes annually.

Each train is designed to carry up to 1,500 tonnes per trip; equivalent to roughly 50 forty-foot containers, compared to the 20 - 40 tonne capacity of a single truck. The scale advantage on bulk goods like cement, grains, and minerals is significant.

Beyond freight revenue, Traxport expects to generate $245 million in carbon credit sales over 15 years by displacing diesel-heavy road transport, a meaningful foreign exchange earner tied to the company's ESG positioning. Last-mile logistics will be handled by third-party haulage partners, including BHN and Red Star Logistics.

The Rail vs. Road Case

The competitive argument for rail on the Lagos–Kano corridor is straightforward:

• Cost: Rail offers 30 - 50% lower cost per ton-kilometre, amplified further by gas-powered engines.

• Capacity: A single train trip moves what would require between 37 and 75 trucks.

• Reliability: Defined schedules replace the unpredictability of road congestion and closures.

• Safety: Secured NRC and NSA-supported corridors reduce the cargo theft risk endemic to road freight.

• Sustainability: Gas-powered rail cuts CO₂ emissions by up to 50 - 75% per ton-kilometre compared to diesel trucks.

What Traxport Is Seeking

The company is actively in conversations with institutional investors and is seeking strategic partners willing to co-invest across the rail freight and VGP verticals. The project offers first-mover advantage in Nigeria's rail-based freight and gas distribution sectors, alongside revenue streams from freight tariffs, gas transport fees, and carbon credit monetisation.

To explore the full investment case - including financial projections, technical specifications, route maps, and the complete KPMG feasibility framework - download the official Traxport Rail Services investor presentation below.

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