Kosovo: EIB and European Commission support railway modernisation with EUR 82 million of initial funding
More than EUR 80 million has been made available by the European Investment Bank (EIB) and the European Commission (EC) to start the modernisation of 148 kilometres of railways in Kosovo, connecting it to the European network.
A EUR 42 million loan agreement for the modernisation of the Kosovo part of European Rail Route 10 was signed today by EIB Deputy Director General Romualdo Massa Bernucci and Kosovo Minister of Finance Avdullah Hoti, in the presence of Head of the EU Office in Kosovo/EU Special Representative Samuel Žbogar.
At the same time, the EU will initially support the project with a EUR 40 million grant for project preparation and implementation. An additional EU grant of EUR 40 million is under consideration for later stages of the project
"This is the first EIB loan ever to the public sector in Kosovo," said Mr Massa Bernucci. "The loan contributes to the Bank’s commitment to support climate action as a result of the expected overall reduction in greenhouse gases arising from the modal shift of freight and passengers due to the project."
"Through this project, Kosovo will receive a significant investment grant from the EU, as part of the EU's concrete contribution to the connectivity agenda for the Western Balkans and its commitment to the region's European perspective within the framework of the Berlin process," said Mr Žbogar.
"The rehabilitation of the railway network will directly benefit the Kosovo people. The rail connection will result in significantly improved passenger and freight capacity and travel times, with reduced CO2 emissions. The funds granted by the European Union are expected to bring at least double the amount into the local economy in the long term."
The railway modernisation project was included in the investment package approved at the Western Balkan summit in Vienna in August 2015, under the European Union's wider agenda to promote connectivity in the region and with the EU. The project will integrate Kosovo’s rail network into the Orient/East-Mediterranean Core Network Corridor, connecting the Western Balkans to Austria, Greece and Bulgaria and forming part of the Trans-European Transport network (TEN-T).
Rail Route 10 is 250 km long, 148 km of which are in Kosovo and the rest in the former Yugoslav Republic of Macedonia and Serbia. The modernisation work is expected to start in late 2016 and be finalised by the end of 2020.
At present, the project for modernising Kosovo’s railways has received commitments totalling EUR 122 million. In addition to the EUR 40 million EU grant and the EUR 42 million EIB loan, the project will receive a EUR 40 million loan from the European Bank for Reconstruction and Development (EBRD), which was approved in September 2015. The Western Balkans Investment Framework (WBIF) has also contributed to the project.