JSC Ukrzaliznytsia is to receive a significant boost in funding to restore and modernize Ukraine's rail infrastructure. The European Investment Bank (EIB) has agreed to provide a EUR 100 million loan for this purpose, as confirmed by a decision of the Ukrainian Cabinet of Ministers on 1 September.
This loan will be instrumental in financing various aspects of the railway infrastructure, including design, construction, modernization, equipment, repairs, engineering, and acquisition of assets to support the growth of rail freight transport.
In 2016, Ukraine and the EIB launched a railway modernization project. However, the ongoing hostilities in Ukraine have significantly impacted the railway infrastructure, leading to a decline in production, trade flows, and, consequently, Ukrzaliznytsia's core business of freight transport. This decline in revenue has necessitated financial support to revitalize the sector.
As part of its commitment to support Ukraine's railway sector, the EIB had previously signed a EUR 6.7 million grant agreement with Ukrzaliznytsia. This grant is aimed at addressing the immediate needs of Ukraine's rail transport system.
This financial injection from the EIB is expected to play a pivotal role in restoring and enhancing Ukraine's rail infrastructure, thereby fostering economic growth and trade in the region.
