The European Investment Bank and Czech Ministry of Finance signed a CZK 13 billion (EUR 527 million) loan agreement for major Czech railway upgrade projects. The financing is the second tranche of a CZK 48.8 billion (EUR 2 billion) EIB operation, to increase the capacity of Czech railway network for freight and passenger transport while making them safer and more comfortable. Works to benefit lines across country and strengthen trans-European transport network (TEN-T) with three major corridors running through Czechia.
“I highly appreciate this long-lasting cooperation, as we can finance some long-term investments of a strategic nature through a loan with a lower interest rate than we could receive on the market with standard bond issuance,” the Minister of Finance Zbyněk Stanjura said.
The funding will improve TEN-T railway lines in the Czech Republic and enable the deployment of the European Rail Traffic Management System (ERTMS).
The project will be managed by Správa železnic, the national railway infrastructure manager, under the authority of the Czech Ministry of Transport.
The first part of the loan worth CZK 24 billion (EUR 970.7 million) was signed in October 2023.
Installing ERTMS
Správa železnic will use the latest round of financing to continue installing ERTMS, a rail traffic management system that not only is compulsory in the European Union but also greatly reduces the risks of human error and accidents. Other benefits of the system include higher capacity, potentially allowing for more travel options and lower operating and maintenance costs, from electricity savings in particular.
Czech railway upgrade projects are needed to increase capacity of the infrastructure and are among the main priorities of the government.
“The need for investment, however, exceeds the possibilities of our national budget. The EIB loan will enable us to progress faster and on a much larger scale so that our railway network offers transport of passengers and goods of a higher quality. With regard to the planned construction of high-speed railways, we would like to cooperate with this institution over a longer period of time,” Martin Kupka, the Minister of Transport said.
As regards safety, modern rail crossings in the Czech Republic could avoid up to 180 incidents annually resulting in 30 to 40 deaths a year.
Správa železnic plans to install barriers at level crossings or replace them with bridges or tunnels, so that cars, bikes and pedestrians can cross the railway lines without going on the tracks.
Upgraded railway stations and buildings
The project also includes works in railway stations and buildings to improve accessibility for people with reduced mobility and travellers with children. It consists of some 40 sub-projects scheduled to be finished by the end of 2028.
Around a quarter of the upgrades will happen in the Prague region, but the vast majority are planned in areas that fall under EU cohesion policy.
Once complete, the project will benefit approximately 90 million passengers annually and facilitate the transport of more than 8 million tonnes of freight.
The signed facility builds upon a 2022 Memorandum of Understanding to establish a partnership to modernise Czechia’s railway network.
Under the memorandum, the EIB committed to providing financing of up to EUR 7 billion and technical assistance to the Czech railway infrastructure administrator.
Several of the current sub-projects were prepared with the support of JASPERS, to help project owners align with EU standards to improve their chances of securing EU funding.
The Czech railway upgrade projects will increase both maximum speeds and capacity on sections of the TEN-T network. The investment supports the transport policy of the country for the period of 2021 to 2027. This framework envisages an energy-efficient and climate-resilient transport system with a neutral impact on the environment. Shifting passenger and freight transport from roads to rail would minimise noise, pollution and CO2 emissions.
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