Ukrainian Railways receives further funding boost from EBRD
Posted: 6 September 2022 | Elliot Robinson (Editorial Assistant - Global Railway Review) | No comments yet
EBRD has repurposed €98.8 million to give Ukrainian Railways a financial boost to address their urgent liquidity needs.
Ukrainian Railways (UZ) are set to receive a further financial boost as the EBRD have announced the repurposing of a further €98.8 million to an existing loan to UZ. This comes after EBRD previously agreed in June to repurpose an initial €50 million of the loan. The funds will allow UZ to address critical liquidity needs, ensuring vital railway passenger and cargo transport services are available for people and business affected by Russia’s war on Ukraine.
The original €150 million loan to Ukrainian Railways was for a project to upgrade and electrify a part of the railway system in Ukraine, which was not disbursed. Having disbursed €50 million to support the company’s liquidity in August, the EBRD will now repurpose 73.3 million of the existing undrawn commitment and €25.5 million uncommitted financing to extend its emergency liquidity support. The loan will remain sovereign guaranteed.
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Despite the impact of the war, UZ has maintained cargo and passenger transportation operations if at reduced capacity. As of August, UZ had evacuated more than 3.8 million people from areas affected by military hostilities and delivered around 180,000 tonnes of humanitarian aid. The closure of Ukrainian ports due to a Russian naval blockade further highlighted the importance of rail transportation for maintaining Ukraine’s agricultural exports logistics, a key sector of the national economy. Ukraine is an agricultural producer of global importance, and its exports are needed to maintain global food security.
The €98.8 million repurposed now for UZ’s use is expected to be supported by up to 50 per cent guarantee coverage from a G7 donor. The earlier €50 million transaction was supported by the European Union’s European Fund for Sustainable Development (EFSD) as part of a common programme with the EBRD that focuses on municipal, infrastructure and industrial resilience in the EU’s eastern and southern neighbours.