A US$120mn EBRD loan to Ukraine’s main passenger and freight carrier Ukrzaliznytsia (Ukraine Railways) is the bank’s largest yet in the country. The sovereign-backed loan, the bank’s second loan to Ukrzaliznytsia, will be used to introduce fast train services country wide, acquire track maintenance equipment and rebuild Beskyd Tunnel, a major trans-European bottleneck.

The loan is a key element of Ukrzaliznytsia’s long-range plans to become more efficient and commercially oriented as demand for railway services rises. Riccardo Puliti, director of the EBRD transport team, says the bank has had fruitful cooperation with Ukraine Railways since 1999 and that support of the country’s transport sector remains a top priority. Our portfolio of transport projects in Ukraine now stands at €270mn, which makes the EBRD one of the biggest international financiers in the sector, Puliti adds.

Successful preparation of the project would not have been possible without Austrian government funds, which financed a feasibility study and geological survey preparation for the Beskyd Tunnel segment. Further technical cooperation funds are to be provided by EU-Tacis and used for geological surveys, environmental management and institutional strengthening.

In Ukraine, the EBRD’s cumulative investment stands at €1.3bn through 58 projects.