Ukrzaliznytsya obtains additional EBRD loan

The European Bank for Reconstruction and Development (EBRD) announced a sovereign guaranteed loan of up to EUR 200 million, consisting of EUR 100 million to provide emergency capex financing to the Ukrainian Railways (UZ) and EUR 100 million to provide capital structure support.

The loan will facilitate the expansion of the cross-border capacity and improve railway connectivity corridors with EU, address border crossing bottlenecks and mitigate war impact through rehabilitation of the relevant railway sections and other critical infrastructure investments. The loan is also expected to benefit from the “donor funded” guarantee to be provided by the G7/EU to cover 50% of exposure, where local commercial financiers cannot provide such risk-sharing mechanism.

The capital structure support project will support the company in addressing immediate critical needs to improve operations and ensure improved connectivity with EU, continue to provide vital services to people and businesses including the private sector, maintain logistics of key Ukrainian exports, including agricultural products and critical imports. The financing would allow UZ to rehabilitate the key railway corridors on the border with EU and procure the rolling stock  thereby providing a comprehensive solution for the Company to expand capacity on these  rail corridors.

In September 2022 the EBRD has proposed a EUR 99 million to an existing loan for Ukrzaliznytsya and in December 2022, the bank together with the Government of France decided to support the rail company with a EUR 150 million loan, EUR 49.4 million being the guarantee od France. This will help Ukraine to keep providing rail transport services and the  energy supply.

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