EIB: €1 billion for Czech railway sector

EIB: €1 billion for Czech railway sector
© Správa železnic

The European Investment Bank (EIB) has signed its largest ever loan agreement in the Czech Republic with the Ministry of Finance for €992 million to support the modernisation of the country's rail network.

Through Správa železnic, the national railway infrastructure manager under the Ministry of Transport, the loan will support the modernisation and upgrading of the country's Trans-European Network (TEN-T) railway lines and enable the deployment of the European Rail Traffic Management System (ERTMS).

"It is a pleasure to know that our meeting last October has produced this important result. This is the largest EIB loan ever signed in the Czech Republic and the funds will greatly benefit the use of rail transport in the country", commented EIB Vice-President Kris Peeters. "We expect that the improved quality of rail services will encourage a modal shift from road to rail, thereby reducing the negative impact of the transport sector on the local environment," he added.

As part of the broad programme financed by the EIB, Správa železnic will improve the safety of level crossings on the network, retrofit maintenance vehicles with ERTMS equipment and strengthen the company's cyber security. The investment will also include work on stations and railway buildings to improve accessibility for people with reduced mobility and those travelling with children.

"The use of a loan from the European Investment Bank is the most economical and efficient solution to obtain funds for a strategic investment such as the digitalisation and automation of rail transport, given the current level of the general government deficit. We can therefore finance long-term investments of a strategic nature through a loan from the EIB at a lower interest rate, while at the same time using funds from the general government budget for other equally important priorities," said Czech Finance Minister Zbyněk Stanjura.

The funding is expected to accelerate the increased use of rail transport, which has clear environmental advantages over traditional road transport.

"The development of high quality railways is key for the Czech Republic both domestically and in Central Europe. Multi-source financing of these projects, which are necessary for the country's prosperity, is the right choice at this time. Investing in the future cannot stop. EIB loans are an important part of the financial portfolio of the projects, thanks to which we are able to draw on other resources such as EU support. We will use them, for example, to modernise Prague's Masaryk Railway Station and the important Karlštejn - Beroun line near the capital," said Martin Kupka, Minister of Transport.

The modernisation of the railway lines will increase both the maximum speed and the capacity of sections of the TEN-T network, which is expected to improve connectivity between EU regions. The operation consists of around 40 sub-projects in different parts of the country, which are part of the Czech Republic's "Unified Railway Framework" plan for 2023-2027.

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