Estonain Railways is buying 16 new diesel-electric shunting locomotives worth 30.2 million euros from a Chinese company.
The new engines will replace 1960s Czech locomotives in use by subsidiary EVR Cargo and are the company's first major investment into traction in about ten years.
The first of the locomotives from the state-owned China National Corporation for Overseas Economic Cooperation (CCOEC) should arrive in the first half of 2012 and the remaining 15 in the second half of 2013.
Other than Chinese steel, much of the locomotive kit consists of American engines and European machinery.
"The new locomotives are modern, efficient and economical and provide significant savings in fuel, maintenance and repair costs ," said Estonian Railway spokesperson Urmas Glase.
In past years, EVR Cargo has invested mainly in buying railway cars. The last major locomotive purchase was around ten years ago with a purchase from the US.