The European Bank for Reconstruction and Development (EBRD) has granted a €23 million loan to Moldovan Railways to support the rehabilitation of two crucial sections of railway lines on Moldova’s North-South Rail Corridor.
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This initiative is part of the EU Solidarity Lanes project, which aims to enhance transport connections to and from Ukraine.
The project will not only drive Moldova’s economic development but also facilitate faster and more efficient transportation of goods from Ukraine to the European Union via Moldova, an EU candidate country.
With shipping routes to and from Ukraine facing challenges due to Russia’s recent invasion, upgrading alternative routes has become strategically important for maintaining global food security, particularly since Ukraine is a major food producer.
As road and rail traffic between Ukraine and the European Union is expected to increase substantially during the Ukrainian reconstruction phase, the project has attracted an investment grant of up to €20 million from the European Union through its Foreign Policy Needs instrument.
Moldovan Railways (Calea Ferată din Moldova, or CFM), which will oversee the project implementation, will provide the remaining €28 million of co-financing for the €71 million project.
The project aims to enhance Moldova’s logistics and transit potential by improving regional infrastructure. It will begin by rehabilitating the Valcinet – Balti – Ungheni rail section and subsequently the Chisinau – Cainari section of the corridor in a second phase.
The EBRD funds and EU grant will be utilized for the acquisition of materials necessary for the rehabilitation of these railway sections.
By easing the transportation of Ukrainian goods to key ports such as Constanta on the Black Sea, as well as ports in Romania, Moldova, and Ukraine (Galati, Reni, Ismail, and Giurgiulesti), the project will contribute to increased food security.
These ports possess significant operational capacity capable of accommodating a substantial portion of Ukraine’s export requirements.
Moreover, the project will yield environmental benefits by shifting the transportation of goods from road to rail.
Currently, most goods transported from Ukraine to western destinations via Moldova rely on road transport, which has a higher carbon footprint. The project will enable train lines to carry larger volumes of freight at a faster pace.
In addition to the investment grant, the project will receive technical cooperation support of €230,000 from the EBRD’s Shareholder Special Fund (SSF) to aid project implementation.
As Moldova’s largest institutional investor, the EBRD has committed over €2 billion to 163 projects in the country to date. ■