The Ukrainian Railways joint-stock company (JSC Ukrzaliznytsia) and the European Bank for Reconstruction and Development (EBRD) have signed a framework agreement on provision of a loan of USD 100 million to JSC Ukrzaliznytsia at the interest rate of 7.929% per annum.

The loan has a final repayment date of 2024, the CFTS portal reports, citing the Ukrainian Ministry of Infrastructure.

According to the document that was signed between the EBRD and JSC Ukrzaliznytsia, 70% of the funds will be used to finance rehabilitation of Ukraine’s railway infrastructure on the Trans-European Transport Network (TEN-T) corridors within Ukraine. The remaining 30% will be used to upgrade signaling and communications equipment, as well as to improve the railway traffic system.

“Following wagons and locomotives, we are investing in development of infrastructure. With our partners from the EBRD, a decision has been made to partially upgrade the railway track of the TEN-T transport corridors through which about 80% of all transit cargoes pass. In addition, we are committing upgrade of dispatching and communications devices," JSC Ukrzaliznytsia’s Board Chairman Yevhen Kravtsov wrote.

As reported earlier, JSC Ukrzaliznytsia and the EBRD intend to agree a plan for implementation of the agreement that will determine the full list of modernization projects in the near future.

According to the Ukrainian Ministry of Infrastructure, JSC Ukrzaliznytsia will issue additional Eurobonds worth USD 100 million. "The EBRD will finance Ukrzaliznytsia’s infrastructure projects through the issuing of Eurobonds... These funds will be used exclusively for purchase of materials. We will perform the work ourselves," Kravtsov wrote, adding that tenders would be held in accordance with EBRD rules.

"The EBRD supports further integration of the Ukrainian railway system into international networks by investing up to USD 100 million in bonds issued by the Ukrainian national railway company, Ukrzaliznytsia. The EBRD's subscription is approximately 17% of the total issue. The bonds will be listed on the Euronext exchange on Dublin. Proceeds from placement of the bonds will be used to reconstruct priority railway lines, mainly those belonging to the Trans-European Transport Networks," senior EBRD external relations officer Anton Usov said.

As reported earlier, the Eurobonds that Ukrzaliznytsia issued in July this year have been permitted to trade on the Ukrainian stock market.

JSC Ukrzaliznytsia recently issued Eurobonds for USD 500 million at the yield rate of 8.25% per annum.

After the placement of Eurobonds, the Standard & Poor's (S&P) international credit rating agency raised JSC Ukrzaliznytsia’s credit rating from CCC+ to B- with a stable Outlook (its credit rating is limited by Ukraine’s sovereign credit rating).