France: EIB and the Lorraine Region: EUR 120m for LGV Est
4 December 2012
A EUR 60 million finance contract to complete phase two of the LGV Est-Européenne high-speed rail project was signed by Philippe de Fontaine Vive, Vice-President of the European Investment Bank (EIB), and Jean-Pierre Masseret, President of the Lorraine Regional Council. This constitutes the first instalment of a total EUR 120 million long-term loan out of a total project cost estimated at EUR 2.1 billion.
Against the current backdrop of lending contraction on the market, this loan has been established with a long maturity and on the best terms available at present thanks to the EIB’s triple A rating.
Following on from the financing provided for the first phase of the LGV Est-Européenne project (EUR 100 million directly and EUR 100 million intermediated), this EUR 120 million financial commitment will serve to link the Lorraine high-speed train station (Baudrecourt) to the Alsace high-speed train station (Vendenheim) by 2016 through the construction of 71km of new line between Baudrecourt and Danne-et-Quatre-Vents. This will cut journey times from Paris to Strasbourg by 30 minutes (from 2 hours 20 minutes to 1 hour 50 minutes) and from Luxembourg to Strasbourg by 45 minutes (from 2 hours 10 minutes to 1 hour 25 minutes). This EIB loan will also serve to finance improvements at the Baudrecourt junction and the Lucy and Réding connections.
With the signature of this loan, the EIB is confirming its position as the leading public-sector investor in this large-scale project to upgrade and extend trans-European networks (TENs). The LGV Est-Européenne is a key link in the 1 501 km Magistrale for Europe high-speed rail project connecting Paris to Bratislava and Budapest. Traffic on this new high-speed line is expected to grow by 12% compared to the current level, i.e. around 935 000 additional passengers.
Philippe de Fontaine Vive, EIB Vice-President, stressed the importance of this loan: "I am delighted that the EIB is again involved in financing this large-scale, innovative project. Our remit is to support regional authorities in funding sustainable, safer infrastructure, revitalising the regions served and opening them up more to trans-European networks and corridors."
Jean-Pierre Masseret, President of the Lorraine Regional Council, welcomed the operation:“This partnership with the European Investment Bank enables theLorraine Regional Councilto enjoy better funding terms than with private banks. In the context of sound management of the public coffers for all the people of Lorraine, I fully welcome this partnership.”
More than just a loan, this financing operation demonstrates the EIB’s growing commitment to assisting France’s local and regional authorities, especially in the key area of trans-European transport. In the Lorraine region, the EIB has supported major projects such as the construction of the Robert Schuman hospital and the innovative Mettis transport project in Metz. Since January 2012, through the catalytic effect on its financing partners, the EIB’s support for French local and regional authorities has enabled nearly EUR 7 billion worth of investment. This engagement is destined to become even stronger following the European Council’s decision to increase the Bank’s capital by EUR 10 billion.
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