CARANSEBES-ARAD RAILWAY - RRF CO-FINANCING

Promoter – Financial Intermediary

ROMANIA

Location

• Romania

Description

The project consists of upgrading 155 km of existing single-track electrified railway line, including doubling of the whole length between Arad and Caransebes. The railway line is part of both the Rhine-Danube and the Orient/East-Med Core TEN-T Corridors. The upgrading of the mixed traffic (passenger and freight) railway line includes an increase of maximum design speed (160 km/h for passenger trains and 120 km/h for freight trains), axle load and maximum permissible train length, as well as installation of European Railway Traffic Management System (ERTMS) level 2 in order to bring the project in compliance with the relevant Technical Specifications for Interoperability (TSIs).

Additionality and Impact

The project consists of upgrading and doubling of 162 km of railway line, between Arad (about 30 km East of the HU/RO border) and Caransebes. The line is part of both the Rhine-Danube and the Orient/East-Med Core TEN-T Corridors and connects to other major Romanian cities on the eastern side, such as Craiova, Bucharest and Constanta continuing on the Rhine-Danube TEN-T Corridor as well as to Calafat/Vidin (RO/BG border) on the south-eastern side on the Orient/East-Med TEN-T Corridor. The northern end of the project alignment, continuing from Arad on the Rhine-Danube TEN-T Corridor, is connected to the RO/HU border and hence to Budapest and western Europe.

The Project, located in Western Romania (a less developed region), is expected to reduce journey times and consequently strengthen socio-economic dynamism as well as contributing to the improved accessibility of both urban areas as well as other parts of the region.

The shift of passenger and freight traffic to rail addresses market failures by minimising a number of transport externalities, such as the harm to humans in terms of accidents and loss of life, or environmental externalities such as noise, pollution and CO2 emissions.

The project is expected to be 100% eligible under Climate Action and Environmental Sustainability. JASPERS provided limited technical advice on the feasibility study and the Bank provides project implementation to CFR and Managing Authority through the Project Advisory Support Unit (PASU) located in Bucharest. In addition to the technical assistance, the EIB contribution to the operation in terms of long term financing and more favourable financial conditions in comparison to the financial market, will provide a substantial value added. The EIB loan is expected to leverage RRF funds amounting to EUR 1,155m thus contributing to the project acceleration.

Objectives

The project is located in an EIB Cohesion Priority Region and the railway is on the core Trans European Transport Network (TEN-T). The project will be compliant with the Technical Specifications for Interoperability (TSIs), including installation of European Rail Traffic Management System. The project will significantly improve the quality and travel time of the rail connection between Arad and Caransebes and is expected to result in time savings as well as in some modal shift from road to rail with the corresponding vehicle operating cost savings, transport safety improvements and environmental benefits in terms of reduction of noise, GHG emissions and pollution.

Sector(s)

• Transport - Transportation and storage

Proposed EIB finance (Approximate amount)

EUR 300 million

Total cost (Approximate amount)

EUR 1758 million

Environmental aspects

The project falls under Annex I of the Environmental Impact Assessment Directive (EIA) 2011/92/EU amended by Directive 2014/52/EU. The environmental impacts of the project, the EIA procedure and the need for assessment according to the Habitats Directive 92/43/EEC will be analysed during the appraisal. The project will significantly improve the rail connection between Arad and Caransebes and is expected to result in modal shift from road and to rail with the corresponding environmental benefits in terms of reduction of noise, GHG emissions and pollution. The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation and pollution prevention and control.

Procurement

The Bank will require the promoter to ensure that contracts for implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.

Status

Signed - 7/01/2025