The European Investment Bank (EIB) is lending EUR 55 million to finance the construction of a new 1.8 km twin-track railway tunnel in Ukraine on the Eastern Partnership regional network to improve transport connections between the country and the European Union.
EIB Vice-President László Baranyay, responsible for lending operations in Ukraine, commented:
“The EIB is sending a strong message by providing a loan to Ukraine that will finance the upgrading of interconnections along a crucial transport corridor that is of the utmost importance for the further deepening of the integration between Ukraine and the European Union. At the same time, this is the first EIB loan supporting the railway sector in Ukraine, so contributing to the development of an environmentally friendly mode of transport. This project is in line with the intention of the EIB announced earlier this year to provide lending in Ukraine amounting to some EUR 3 billion in the coming three years (2014-2016) to support the development of Ukraine and its economy and foster deeper integration with the EU”.
“The Beskyd tunnel construction is one of the main Eastern Partnership projects in field of transport in Ukraine” the EU Ambassador Jan Tombinski noted. “Until now it was a bottleneck of transport even if over half of the transit of goods between Ukraine and Central and Western Europe pass this tunnel. The Beskyd tunnel project is also an excellent example of coordinated efforts of the EU, Ukraine and the international financial institutions in transport cooperation.”
The new tunnel, located in the Carpathian Mountains at Beskyd in south-west Ukraine, will replace the existing single-track tunnel, which is the only single track section of the line on the otherwise twin-track electrified corridor between Lviv and the Hungarian and Slovak borders.
After completion, the new tunnel will add significant transport capacity at a notorious bottleneck on an international rail corridor and make it possible to cope successfully with the expected future demand.
The Beskyd railway tunnel is a priority project located on the Eastern Partnership transport network, endorsed on 9 October 2013 by the Transport Ministers of the EU Member States and Eastern Partnership countries and the European Commission.
This project represents a good example of cooperation between the EIB and its partner financial institution the European Bank for Reconstruction and Development (EBRD), which is cofinancing the construction of the Beskyd Tunnel with the EIB and Ukraine.
The EIB has to date signed loans in Ukraine, including the current one, totalling some EUR 2.1 billion for projects in the energy, transport and water sectors, and – indirectly through commercial banks – operations supporting SMEs.
The EIB – the European Union’s bank – finances projects in Ukraine on the basis of an EU Council and European Parliament mandate for the countries of the Eastern Neighbourhood of EUR 3.84 billion for the period 2007-2013. The current mandate provides for the financing of projects of significant interest to both the EU and its Eastern Neighbours, in the areas of local private sector support, social and economic infrastructure and climate change.