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The European Investment Bank (EIB) is lending EUR 50m to the Republic of Moldova to finance the improvement and modernisation of Moldova’s railway network and rolling stock. The project has received a 5 million EUR investment grant from the European Union, and is co-financed with the EBRD. This is the first time EIB financing has been granted to the Moldovan railways sector, and will upgrade assets partially located on the extended TEN-T and contribute to the achievement of the objectives of the EU-Moldova Association Agreement.

EIB, EU and EBRD funds will help to foster trade both in Moldova and between Moldova and its trading partners in the EU and Eastern Neighbourhood region. The EIB loan will contribute to enhancing the competitiveness of local products and generating efficiencies, potentially increasing exports. This project is part of a broader programme which also includes the restructuring of the Moldovan railway sector in order to enable it to provide adequate services and to compete with other modes of transport.

The EIB support provided to the railway sector will have a positive environmental impact by preventing modal shift from rail to road, and by reducing pollutants, greenhouse gas emissions and noise levels. It will increase passenger safety and operational speed, and reduce vehicle and infrastructure operating costs, which will lead to an improvement in the financial sustainability of Moldova’s national railway company (CFM), the final beneficiary of the EIB loan.

 

The project consists of two components: the acquisition of mainline diesel locomotives and the associated maintenance equipment and the rehabilitation of selected sections of the railway infrastructure. The new locomotives will replace their obsolete predecessors and the railway infrastructure rehabilitation will be carried out on sections whose renewal is long overdue.

The EIB – the European Union’s bank – finances projects in Moldova on the basis of an EU mandate for the countries of the Eastern Neighbourhood, the so-called External Lending Mandate (ELM). The 2014-2020 ELM provides for a total amount of Bank financing in the Eastern Neighbourhood of EUR 4.8bn to support projects of significant interest to both the EU and its Eastern Neighbours in the areas of local private sector development, social and economic infrastructure and climate action. In addition, the Bank has set up a EUR 3bn own-risk Neighbourhood Finance Facility to enhance its support for the Neighbourhood Countries.

The loan to Calea Ferata din Moldova ÎS signed on the 26 September 2016 comes under ELM and is covered by the EU Comprehensive Guarantee.