MOSCOW - Germany's Siemens on Friday signed an agreement worth $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 (RZD) chief Vladimir Yakunin on the sidelines of German Chancellor Angela Merkel's visit to Moscow.

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, speaking with journalists on the sidelines of the Russian-German talks in the Kremlin. The Siemens and RZD statements gave no financial details.

"Russia is a very important market for Siemens," Loescher was quoted as saying in the Siemens statement, calling Siemens a "reliable partner for the modernization of the country's infrastructure."

Copyright Agence France-Presse, 2012