Czech Ministry of Finance and the European Investment Bank signed a loan agreement of up to CZK 3 billion (EUR 117.16 million) to finance the development of the railway infrastructure. This is the first part of the total loan facility of CZK 11.5 billion (EUR 449 million) dedicated to co-finance the modernisation of selected railway corridor sections as approved by EIB and approved by the government last autumn.
The project execution is provided by the Czech railway infrastructure manager, SŽDC, which also concludes an implementation agreement with EIB.
Under the terms of the project implementation agreement, SŽDC commits to modernising 8 sections of the Rail Transit Corridors I and II. Reconstruction is planned for sections which were modernised years ago, between Prague and Brno as well as the line between Přerov – Ostrava – Petrovice u Karviné – state border with Poland. Total estimated cost of these investment projects amount approximately to CZK 24 billion (EUR 937.3 million).
From this amount, EUR 449 million (CZK 11.5 billion) can be financed from the agreed credit facility which will be used gradually. The first step was to conclude a loan agreement for CZK 3 billion, the negotiation of further contracts will be based on the use of these funds.
Under the EIB provided funding, two railway sections will be modernized totaling 25 km. The Velim – Poříčany and Dětmarovice – Petrovice u Karviné – the state border with Poland are the two sections which will need approximately half of the investment costs. The rest is funded from national sources with a contribution from the Connecting Europe Facility (CEF) programme.
SŽDC received a contribution of EUR 39 million (CZK 1 billion) based on a successful application submitted within the CEF Blending Call. One of the conditions for obtaining the grant was precisely to negotiate and conclude a credit agreement between the Ministry of Finance and EIB.
The basic objective of both constructions is to prevent speed reduction, to ensure interoperability parameters, to bring all infrastructure components into the standard state in order to increase traffic safety and flow, reduce emissions and noise.
These projects also include a modernisation of platforms at stations and stops and providing their barrier-free access and overhead lines, bridges and culverts will be reconstructed. Safety and signalling equipment will be also modernized.