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EBRD financing helps to modernise Uzbekistan's railways
Uzbekistan’s railways will be modernised and restructured with a US$ 40 million (EUR 36.7 million) from the European Bank for Reconstruction and Development (EBRD) to the national railway company, Uzbekistan Temir Yollari (UTY). Guaranteed by the Uzbek Government, the loan will contribute to the modernisation of UTY’s locomotive fleet by funding the purchase of new 8-10 electric freight locomotives. These will enhance energy efficiency, increase equipment reliability and lower maintenance costs.
"The EBRD’s loan will help UTY to improve the effectiveness and profitability of its freight business, increasing its ability to compete both domestically and internationally. Better freight services and lower operating costs mean greater financial stability for the railway company," said David Hexter, Deputy Vice President of the EBRD.
The EBRD’s investment is part of the Railway Restructuring Plan being undertaken by UTY with the support of the Government of Uzbekistan. The project was developed by the EBRD in co-operation with the Asian Development Bank, which is co-financing the first phase of the plan through a US$ 70 million loan to Uzbekistan signed in 1998.
Ruslam Azimov, Uzbekistan’s Minister of Finance, said: "The Government of Uzbekistan and the management of UTY are committed to implementing a comprehensive modernisation strategy for the railways. The support of the EBRD and the Asian Development Bank will help to ensure that the strategy is implemented within the agreed medium-term timeframe."
The Railway Restructuring Plan consists of several initiatives that address the main priorities of the railway sector in Uzbekistan: investment, staff training, regulatory reform, organisational changes, and financial economic restructuring and energy efficiency. Implementation of the plan will ensure that UTY can operate efficiently in a market-oriented economy.
To date, the EBRD has signed 13 projects in the rail sector, totalling approximately EUR 515 million. These comprise projects in Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Poland, Romania, Russia and Slovenia.
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