The European Bank for Reconstruction and Development (EBRD) is lending €23 million to Moldovan Railways to support the rehabilitation of two key sections of railway lines on the country’s North-South Rail Corridor, part of the EU Solidarity Lanes initiative to improve transport to and from Ukraine.

The project will boost Moldova’s economic development, and at the same time make it easier to transport goods more quickly and efficiently from Ukraine to the European Union via EU candidate Moldova. Shipping routes to and from Ukraine, which is a major food producer, have been compromised since Russia’s full-scale invasion last year, giving strategic importance to upgrading other routes to maintain global food security.

With road and rail traffic between Ukraine and the European Union expected to increase further once Ukrainian reconstruction gets underway, the project has also attracted an investment grant of up to €20 million from the European Union via its Foreign Policy Needs instrument.

EBRD President Odile Renaud-Basso and European Commission Executive Vice-President Valdis Dombrovskis signed an agreement to support the project at the EBRD’s Annual Meeting last month. EBRD Head of Office in Moldova Angela Sax signed both loan and grant agreements with Minister of Infrastructure and Regional Development Liliana Dabija today.

The final €28 million of co-financing for the €71 million project will come from Moldovan Railways (Calea Ferata din Moldova, or CFM), which will be responsible for implementing the project.

The project aims to increase Moldova’s logistics and transit potential and bring operational efficiency from improved regional infrastructure through the rehabilitation of railway infrastructure first on Moldova’s Valcinet – Balti – Ungheni rail section and then, in a second phase of works, on the Chisinau – Cainari section of the corridor.

The EBRD funds and EU grant will finance the acquisition of materials needed to rehabilitate the sections of line.

The project will increase food security by making it easier for Ukrainian goods to reach the largest operable port on the Black Sea, Constanta, as well as ports in Romania, Moldova and Ukraine, at Galati, Reni, Ismail and Giurgiulesti. These have a cumulative operating capacity that can absorb a significant part of Ukraine’s export needs.

Moving these goods on to the railway will also bring environmental benefits. The Moldovan network’s current low capacity means that most goods moved west from Ukraine via Moldova travel by road, which is more carbon-intensive. The project will allow train lines to carry more freight faster.

As well as the investment grant, this project will receive technical cooperation support of €230,000 for project implementation from the EBRD’s Shareholder Special Fund (SSF).

Source of Article www.ebrd.com written by Vanora Bennett