Ukraine’s Minister of Finance Serhii Marchenko and the president of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, signed an agreement on amendment of the guarantee agreement for a loan for financing the electrification of Ukrainian Railways (the project for electrification of the Dolynska-Mykolaiv-Kolosivka Railway line) on 10 June. In addition, Renaud-Basso and the board chairman of the Ukrainian Railways joint-stock company (Ukrzaliznytsia), Oleksandr Kamyshin, signed an agreement on amendment of the agreement on provision of loans for the project.

The amendment provides for repurposing EUR 50 million out of the EBRD loan that was intended for financing the railway electrification project to provide liquidity to Ukrzaliznytsia to enable it to meet its critical needs during the war.

The repurposed part of the EBRD loan will be guaranteed by the European Union’s European Fund for Sustainable Development (EFSD), which is a financial mechanism of the EU External Investment Plan.

“This decision shows that first steps are already being taken under a new ‘Marshall Plan’ for rebuilding Ukraine. The first EUR 50 million will help Ukrainian Railways to cope with the significant damage that Russia inflicts every day. We must focus not only on the resilience of our work but also on the recovery of the country’s economy. We continue to provide solutions to increase freight traffic and we have to provide opportunities for Ukrainians to return home. This loan is critical for the maintenance of our stable liquidity,” Kamyshin said.

The EBRD originally agreed to lend Ukrzaliznytsia EUR 150 million for modernization and electrification of the Dolynska – Mykolaiv – Kolosivka railway section and related infrastructure.

According to Ukrzaliznytsia, the original loan has not yet been disbursed.

As reported previously, the Ukrainian parliament ratified the agreement on provision of an EBRD loan for electrification of this railway section in 2019. However, Ukrzaliznytsia did not begin practical implementation of the project. In January 2022, the Ukrainian Ministry of Infrastructure asked the EBRD and the European Investment Bank (EIB) to cancel the tender for the upgrade and electrification of the Dolynska – Mykolaiv railway section, which is the first phase of the project.