Following €150m of emergency liquidity finance that Ukrainian Railways (Ukrzaliznytsya or UZ) received last year to help keep Ukraine‘s trains running, the European Bank for Reconstruction and Development (EBRD) is to lend Ukrainian Railways a further €200 million to upgrade the country’s railway links with the European Union.

Most of Ukraine’s imports and exports – including exports of grain vital for global food security – have traditionally gone by sea. But Russia’s invasion of Ukraine last February prompted improvements to be made with the country’s rail, road and river links with other countries.

€100 million of this latest loan will go towards emergency finance with the other €100 million providing working capital support.

Together, they will mitigate the impact of the war by allowing the expansion of cross-border capacity and improving Ukraine’s railway connections with the EU.

The loan will allow Ukraine’s railways to continue providing vital services to the country’s people and businesses, repair key rail corridors on the country’s border with the EU, and purchase rolling stock.

The EBRD shares its risks on its loans to Ukraine with donors and shareholders and will be supported by guarantees of up to 50 per cent.

The United States of America is providing €60 million with another €40 million coming from The Netherlands. France and the European Fund for Sustainable Development, which also provided guarantees for the EBRD’s earlier finance for Ukrainian Railways.

The project is also expected to be financed by an investment grant of up to €10 million provided by bilateral or multilateral donors. T

hat is intended to cover investment in communications equipment, energy-efficient lighting, and step-free access at several major railway stations, which together will fulfil the project’s resilience and inclusivity objectives.

Although the war is having some effect, Ukrainian Railways has continued with cargo and passenger transportation operations, even if it is at reduced capacity. The EBRD has been working with UZ since before the war started and has continued to support the company since invaded the country.

The EBRD’s loans to Ukrainian Railways are part of the EBRD’s five-pronged approach to supporting Ukraine’s economy, with the focus being on its vital infrastructure, energy, food security, trade finance and support for the private sector.

With €3 billion of investments pledged to Ukraine in 2022-23, the EBRD is Ukraine’s largest institutional investor. Last year, it deployed €1.7 billion with a further €200 million coming from partner financial institutions.