Germany's Siemens has signed an agreement worth 2.5 billion euros ($3.2 billion) to supply Russia's state-owned railways with 675 locomotives in a joint venture with the Russian company Sinara Group.

The memorandum was signed by Siemens chief executive Peter Loescher and Russian Railways chief Vladimir Yakunin.

Russian Railways "expressed its intention of buying 675 two-section cargo electric locomotives in the period from 2016 to 2020," Siemens said in a statement.

The locomotives would be supplied by the German company's joint venture with Sinara Group - Ural Locomotives - which is based in Russia's Sverdlovsk region of the Urals.

Sinara Group's chief executive Dmitry Pumpyansky estimated the contract at around 2.5 billion euros.-Reuters