EU and EBRD support Moldovan Railways rehabilitation project
- EU contributes with a €20 million investment grant and EBRD approves a €23 million loan to Moldovan Railways
- This package to finance materials for rehabilitating two railway line segments will boost Moldova’s economy
- The improvements will facilitate goods transport from Ukraine to the EU via Moldova
The European Commission and the European Bank for Reconstruction and Development (EBRD) have approved a financial package by which the EU will provide an investment grant of €20 million in a project to rehabilitate two key sections of railway lines in Moldova. The EBRD will lend the government of Moldova €23 million, with the remaining €28 million of the costs of the €71 million project being met by Moldova Railways.
Rehabilitating the lines on Moldova’s North-South Rail Corridor will boost Moldova’s economic development and make it easier to transport goods from Ukraine via Moldova to the European Union. Like neighbouring Ukraine, Moldova was granted EU candidate status in 2022.
The project was launched at the EBRD’s 2023 Annual Meeting in Samarkand by EBRD President Odile Renaud-Basso and European Commission Executive Vice-President Valdis Dombrovskis. European Union funding comes via the Rapid Response Component of its Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI - GE).
Moldovan Railways (Calea Ferata din Moldova, or CFM) will be responsible for implementing the project.
Since Russia invaded Ukraine last February, uncertainty over the viability of export by sea of Ukraine’s large grain output has put new emphasis on finding alternative routes to maintain global food security.
The project aims to increase Moldova’s logistics and transit potential and bring operational efficiency from improved regional infrastructure through the rehabilitation of railway infrastructure first on Moldova’s Valcinet – Balti – Ungheni rail section and then, in a second phase of works, on the Chisinau – Cainari section of the corridor.
The project will also increase food security by making it easier for Ukrainian goods to reach the largest operable port on the Black Sea, Constanta, as well as ports in Romania, Moldova and Ukraine, at Galati, Reni, Ismail and Giurgiulesti. These have a cumulative operating capacity that can absorb a significant part of Ukraine’s export needs.
Moving these goods on to the railway will also reduce Moldova’s carbon emissions. Currently, the network’s low capacity means that most goods moved west from Ukraine via Moldova travel by road, which is more carbon-intensive. The project is expected to increase the network’s capacity and lift speed restrictions.