Ukrainian Railways Secures €200 Million Loan from EBRD for Cross-Border Rail Enhancements

(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) has granted a €200 million loan to Ukrainian Railways (Ukrzaliznytsya or UZ) to upgrade railway connections with the European Union. This loan aims to improve cross-border capacity and enhance railway connectivity, allowing UZ to provide vital services, rehabilitate rail corridors, and purchase rolling stock. The EBRD’s support mitigates the impact of the war and ensures continued transportation operations. The loan is backed by guarantees from the United States, The Netherlands, France, and the European Union. Additionally, an investment grant of up to €10 million will be provided for infrastructure enhancements. The EBRD remains committed to supporting Ukraine’s real economy and has pledged €3 billion of investments in the country.

(PRESS RELEASE) LONDON, 8-Jun-2023 — /EuropaWire/ — The European Bank for Reconstruction and Development (EBRD), a multilateral developmental investment bank, announces that it has approved a €200 million loan to Ukrainian Railways (Ukrzaliznytsya or UZ) to enhance the country’s railway connections with the European Union. This loan follows €150 million of emergency liquidity financing provided to UZ last year, which helped maintain train operations in Ukraine.

Since Russia’s invasion of Ukraine, there has been increased uncertainty regarding traditional sea routes for the country’s imports and exports, including vital grain exports for global food security. In response, efforts are underway to improve rail, road, and river links with other nations.

The sovereign loan from EBRD comprises €100 million for emergency finance and €100 million for working capital support. The funding aims to mitigate the impact of the war by expanding cross-border capacity, enhancing railway connectivity with the EU, and enabling UZ to continue offering essential services to individuals and businesses. The loan will also facilitate the rehabilitation of key rail corridors along the Ukrainian-EU border and the procurement of rolling stock.

To share investment risks, the EBRD will receive guarantees of up to 50%, with €60 million contributed by the United States of America and €40 million from The Netherlands. France and the European Union, through the European Fund for Sustainable Development, have previously provided guarantees for EBRD’s earlier financing for UZ.

Furthermore, the project is anticipated to receive an investment grant of up to €10 million from bilateral or multilateral donors. This grant will be allocated to investments in communication equipment, energy-efficient lighting, and accessibility enhancements at several major railway stations, aligning with the project’s resilience and inclusivity objectives.

Despite the impact of the war, Ukrzaliznytsya has maintained cargo and passenger transportation operations, albeit at reduced capacity. The EBRD has been supporting UZ since before the conflict and remains steadfast in its commitment to the rail company.

The loans provided to UZ are part of the EBRD’s comprehensive strategy to support Ukraine’s real economy. This approach encompasses vital infrastructure, energy and food security, trade finance, and assistance to the private sector. As Ukraine’s largest institutional investor, the EBRD has pledged €3 billion of investments in the country for 2022-2023, with €1.7 billion already deployed in 2022, supplemented by an additional €200 million mobilized through partner financial institutions.

Media contact:

Tel: +44 207 338 7805
Email: press@ebrd.com

SOURCE: EBRD