Croatia secures funding for rail infrastructure and rolling stock

Croatia’s railway networkThe European Investment Bank (EIB) and the Ministry of Finance signed a EUR 400 million contract to support major upgrade of the Croatia’s railway network and rolling stock.

The loan is part of the EIB’s largest lending operation for Croatia to date, amounting to EUR 900 million in approved financing for the railway sector, of which EUR 715 million will be used for the modernisation of Croatia’s railway network and EUR 185 million for passenger fleet renewal.

The contract was signed by the EIB Vice President Teresa Czerwińska and the Croatian Finance Minister Marko Primorac in the presence of the Deputy Prime Minister and Minister of the Sea, Transport and Infrastructure Oleg Butković. The contract signing ceremony was also attended by the President of the Management Board of HŽ Infrastruktura Ivan Kršić and the President of the Management Board of rail passenger operator HŽ Putničko vervožių, Željko Ukić.

“This is another contribution to the good cooperation that our ministry has with the EIB. Funds from this loan will enable us to make further investments in railway infrastructure, for the renovation and construction of local and regional railways, those parts of the network that we cannot finance with EU grants. This is extremely important to us and shows the intention and determination of our ministry and the government to continue to invest massively in the entire railway system, in which over the next ten years we expect major investments from all available funds,” said Oleg Butković, Croatia’s deputy Prime Minister and Minister of the Sea, Transport and Infrastructure.

The first tranche of the EIB’s approved financing provides favourable long-term funding, alongside EU grants, which will boost sustainable transport and a shift from roads to rail and thus significantly improve safety for passengers, while reducing traffic congestion, air pollution and greenhouse gas emissions.

The EIB funding will be used for the rehabilitation, modernisation, expansion and improvement of the railway infrastructure and rolling stock in the country.

Marko Primorac, the Minister of Finance, said that the government is committed to invest in Croatia’s railway network EUR 2.6 billion from state budget and the National Recovery and Resilience Plan, which will provide safer, faster, more efficient, and greener transport solutions to its citizens.

Excepting the EIB financing, “other financial sources include EU funds and, partially, own funds. These figures indicate the strong commitment of our government to invest in the country’s railway infrastructure and transport system, as well as the EIB’s ability to co-finance EU projects. The investment in railway infrastructure will contribute to the green transition, reduction of greenhouse gases, but also to the construction of a sustainable system of transport of goods and passengers,” said the Minister of Finance.

Under the agreement, the national railway infrastructure company Hrvatske željeznice Infrastruktura (HŽI) will carry out projects for the rehabilitation and modernisation of the railway network, and the national passenger train operator Hrvatske željeznice Putnički prijevoz (HŽPP) will be in charge of acquisition of the rolling stock. Both companies will work under the supervision of the Ministry of the Sea, Transport and Infrastructure.

The EIB financing will support the rehabilitation of 500 km of mostly local and regional rail lines in Slavonia and Podravina regions, and in the cities of Zadar, Knin and Karlovac. The financing will also support the modernisation of 30 stations and stops such as those in Pula, Buzet, Vodnjan, Sesvete, Virovitica and Pleternica.

Croatia is currently implementing rail infrastructure projects worth around EUR 1.5 billion co-financed by the European Union.

According to the President of HŽPP, the EIB funds will include the procurement of 14 new trains, of which six are for long-distance transport, connecting Zagreb and Split. The company will also acquire 8 battery and electric battery trains to operate the non electrified lines.

In 2022, HŽPP signed a EUR 31 million contract with Končar for the supply of 7 three-car diesel-electric multiple units. In 2020, the EIB approved a loan of EUR 21 million for the acquisition of 21 EMUs from Končar while Eurofima and IBRD provided EUR 57.9 million financing for the procurement project estimated at EUR 150 million.

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