EIB: up to EUR 7 billion for Czech railway infrastructure construction

Karel Novak, Published on 16/11/2022
EIB: up to EUR 7 billion for Czech railway infrastructure construction
@mdcr.cz

The Czech Republic and European Investment Bank have signed a Memorandum of Understanding on financial and technical support for railway projects between 2023 and 2027.


The Ministers of Finance and Transport, Zbyněk Stanjura and Martin Kupka, signed a Memorandum of Understanding between the Czech Republic and the European Investment Bank in Prague with Lilyana Pavlova, Vice President of the EIB, the purpose of which is to establish a framework for the planned cooperation between the two parties in connection with the financial and technical support needed for the development of strategic railway infrastructure projects in the Czech Republic.

The signing of the Memorandum followed a meeting between Ministers Zbyněk Stanjura and Martin Kupka at the EIB headquarters in Luxembourg. "The need for investments in transport infrastructure exceeds the current possibilities of the state budget, and therefore we announced that we will supplement them with other financing instruments, such as loans from the EIB. We are concluding the Memorandum because we want to cooperate with the EIB in the long term with a view to the upcoming construction of the Czech high-speed rail network," says Transport Minister Martin Kupka.

Following the adoption of the Memorandum, it is expected that a loan agreement will be signed between the Czech Republic and the EIB, as well as a loan agreement between the Ministry of Finance and the State Fund for Transport Infrastructure. The loan should be granted to the Czech Republic represented by the Ministry of Finance and further transferred to this state fund in the form of a loan.

"We have taken another important step towards being able to draw advantageous loans from the European Investment Bank over the next five years, the first nearly CZK 25 billion already next year. The money should be directed to investments in digitalization and automation of railway transport, electrification of railway lines, and support for regional transport," says Finance Minister Zbyněk Stanjura and adds: "I consider it highly expedient and economical to optimize the state's debt instruments in the current turbulent times. Given the volatility of the financial markets, we expect the terms of the loan to be more favorable than the standard state financing instruments."

Large projects such as major rail corridors and TEN-T nodes, where the infrastructure is electrified, or where electrification is planned within ten years, or where the infrastructure will be adapted for zero-carbon train operation within ten years, will be prioritized for support through individual EIB loans.

EIB Vice President Lilyana Pavlova said, "The MoU we have signed will allow us to work together to find the most effective models for EIB involvement in the Czech government's plans to modernize the national rail network. The EIB wants to further intensify our existing support for the modernization of the Czech rail network and contribute to safer, greener, and more reliable transport alternatives that can benefit Czech citizens and businesses alike. We believe that this is crucial for the sustainable and long-term economic and social development of the country and the EU. This memorandum underlines the EIB's role as a reliable partner on which the Czech Republic can continue to rely in building a sustainable and green future for its citizens."

Until 2030, these resources can also support rail lines of regional importance where infrastructure is not electrified, as well as investments in digitalization and automation to optimize the use of rail capacity and improve safety and interoperability. This will also allow integration and interconnection between the different modes of transport in the transport system.

@mdcr.cz
@mdcr.cz

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