The European Investment Bank (EIB) is providing the largest loan to date in the Eastern Partners: EUR 450 million for the rehabilitation and quality improvement of roads in Ukraine. EIB funds will help to improve some 350 km of five sections of highways branching out from the Ukrainian Capital Kiev, representing crucial European and national transport corridors largely on the extended Trans-European Transport Network (TEN-T).
The project is being co-financed by the European Bank for Reconstruction and Development (EBRD) with a loan of EUR 450 million. The works, predominantly covering the road corridors interconnecting Dresden-Katowice-Lviv-Kiev and Moscow-Kiev-Odessa as well as key national corridors in Ukraine, will be implemented in two phases by Ukravtodor, the State Roads Administration of Ukraine.
EIB Vice-President Eva Srejber stated: “The current project is significant for the further development of the economic cooperation between the European Union and the Eastern Partner Countries. It will upgrade Ukraine’s priority transport links with the neighbouring EU Member States and the adjacent Belarus and Russia. It is also a good example of collaboration with the EBRD, our partner financial institution, in implementing important projects of mutual interest to Ukraine and the EU”.
This is the second EIB loan provided for the rehabilitation of the Ukrainian road network. The previous loan of EUR 200 million financed the upgrade of the M-06 road linking Kiev with EU Member States Hungary, Slovakia and Poland.
The EIB – the European Union’s bank – finances projects in Ukraine on the basis of an EU Council and European Parliament mandate for the Eastern Partner Countries (Ukraine, Moldova, Georgia, Armenia, Azerbaijan and Russia) of EUR 3.7 billion for the period 2007-2013. The current mandate provides for the financing of projects that are of significant interest to both the EU and Eastern Partners in the transport, energy, telecommunications and environmental infrastructure sectors, and as of mid-2009 has been extended to also cover loans for SMEs via banks in Eastern Partnership countries.
The EIB has also set up at its own risk the Eastern Partners Facility (EPF) for an amount of EUR 1.5 billion, with a ceiling of EUR 500 million for loans in Russia. This facility enables the EIB to provide loans to support investment grade projects that sectorwise go beyond the scope of the mandate and helps support EU investment in the region, notably by European corporates.
The EIB has so far provided loans in Ukraine, including the current loan, totalling EUR 916 million. Apart from road infrastructure, the Bank has financed projects in the energy sector, the upgrading of water infrastructure and – indirectly through commercial banks – projects supporting SMEs.