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Estonia Railways prepares for privatisation with EBRD loan
A modern railway infrastructure for freight and a safer environment for Estonia’s railway workers are the likely results of a DM 29.2 million (EUR 14.9 million) loan to Estonia Railways signed today by the European Bank for Reconstruction and Development (EBRD). More efficient railways will also boost Estonia’s economic prosperity.
"A central objective of the project is to provide the conditions for successful privatisation of Estonia’s rail freight operations," said Charles Frank, First Vice President of the EBRD who signed on behalf of the EBRD. "Improving rail facilities will protect international freight revenues and meet the growing demand for rail transit services in Estonia," he continued. "An efficient and well-maintained railway network will enhance its competitive position in Europe."
The loan will complement financing of EUR 16 million which is already being provided by the European Investment Bank for track renewal, and a EUR 5 million grant from EU-PHARE for rail infrastructure development.
The EBRD’s loan will support reconstruction and upgrading of the freight yard station at Narva, on the border with Russia. This will increase the yard’s capacity and promote greater operational efficiency by helping to introduce a modern train operating strategy.
In 1998, Estonia Railways carried approximately 31.6 million tonnes of freight, of which 59 per cent was transit traffic. Between 1996 and 1998, transit traffic increased by 64 per cent.
The EBRD has signed 12 loans for railway projects in its countries of operations, committing approximately EUR 500 million to the sector. These include projects in Bulgaria, Croatia, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Russia and Slovenia.
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