The European Bank for Reconstruction and Development (EBRD) will provide a EUR 200 million loan for Ukraine rail upgrade projects managed by Ukrzaliznytsya (UZ).
This follows EUR 150 million of emergency liquidity finance to UZ in 2022 to help Ukraine keep its cargo and passenger trains running.
This sovereign loan comprising EUR 100 million for emergency finance and EUR 100 million for working capital support, will mitigate the impact of the war by facilitating the expansion of cross-border capacity and improving railway connectivity with the EU. It will allow UZ to continue to provide vital services to people and businesses as well as to rehabilitate key rail corridors on its border with the EU and buy rolling stock.
The EBRD shares risks on its Ukraine investments with donors and shareholders. This loan is to be supported by guarantees of up to 50 per cent, with EUR 60 million coming from the United States of America and EUR 40 million from The Netherlands. France and the European Union, through its European Fund for Sustainable Development, provided guarantees for the EBRD’s earlier finance for UZ. In December 2022, EBRD, the Government of France join their efforts to help critical operating expenses to ensure stable rail cargo and passenger transportation, as well as evacuation and humanitarian aid services in Ukraine.
In addition, Ukraine rail upgrade is expected to be financed by an investment grant of up to EUR 10 million from a bilateral or multilateral donors, to cover investment in communications equipment, energy-efficient lighting and step-free access at several major railway stations, fulfilling the project’s resilience and inclusivity objectives.
In May, the World Bank agreed to provide Ukrzaliznytsia a USD 25 million grant for railway projects and increase of freight transport capacity. The contract was signed under a cooperation agreement signed with the United Nations Office for Project Services (UNOPS) in Kyiv.
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