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Latvia prepares for EU accession with EIB/EBRD loans for rail network
Loans provided by the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) will help Latvia Railways bring the country’s railway infrastructure into line with the needs of a modern high-volume transit route.
The EIB loan of ECU 34 million (US$ 41 million) and the EBRD’s US$ 20.5 million (ECU 17 million) loan will be used to modernise rail track in Latvia’s principal rail corridor and to upgrade the rail network at Latvia’s main sea port. This will increase the efficiency of Latvia’s railway transport service and reduce environmental and safety threats at the port by routing some chemicals and oil products away from the populated area.
EU-Phare is providing significant grant funding for rail infrastructure development and technical cooperation funds to help Latvia Railways with its on-going restructuring programme.
Commenting on the loan, EIB Vice-President Wolfgang Roth said: "Latvia has recently made considerable progress on the road to EU membership. The modernisation of its transport infrastructure by investing in the rail, road, air-traffic and port facilities is playing a key role in this. The development of regular, cost-efficient and environment-friendly energy supplies, a modern telecommunications network, as well as the creation of efficient industries, especially small and medium-sized enterprises, also play a key role and are thus strongly supported by the EIB."
"As Latvia moves towards accession to the European Union, a modern railway infrastructure will be critical to its competitive position," said Jean-François Maquet, Deputy Vice President of the EBRD. "One of the EBRD’s main objectives in supporting Latvia Railways’ modernisation and restructuring programme is to improve its efficiency and commercial management, and thus its ability to compete effectively with other transit routes in the Baltic region."
The EIB’s loan will finance renewal of approximately 300 km of single track in the main East-West rail corridor between the Russian border and Latvian ports. The project will contribute to the modernisation of this railway corridor and provide additional capacity to meet growing demand on this key route for transit traffic.
The EBRD’s loan will finance construction of a new rail yard (Juras Parks) and northern rail bypass at the port of Ventspils in the country’s north-west. This will streamline the port’s operations and increase its capacity. The project, which is structured to meet EU environmental, health and safety standards, will improve environmental safety by allowing some chemicals and oil products to be re-routed away from the urban area of Ventspils.
The high level of cooperation between the EIB and the EBRD in developing complementary projects in support of Latvia Railways’ modernisation and restructuring programme paves the way for future collaboration in addressing other infrastructure needs in central and eastern Europe.
The EIB, established in 1958 under the Treaty of Rome setting up the European Community, is the European Union's long-term financing institution supporting capital investment projects that further European integration. While strengthening economically weak regions in the EU has always been its main objective, the Bank also finances projects in support of other EU policies. Since 1990, ECU 8.4 billion has been lent to projects in the ten central European countries which have applied for EU membership.
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