- EBRD investing up to US$ 100 million in Eurobond issued by Ukraine Railways
- Funds to be used for rail track rehabilitation and international integration
- Bonds to be listed on Euronext Dublin stock exchange
The integration of Ukraine’s railway system into the international network will take another step forward thanks to a tap issue of bonds by the national rail transport company Ukraine Railways (UZ), which the EBRD is supporting with up to US$ 100 million.
The Bank’s subscription represents approximately 17 per cent of the total US$ 600 million issue. The bonds will be listed on the Euronext Dublin stock exchange. A tap issue is a process that allows borrowers to sell bonds or other short-term debt instruments from past issues. Bonds of this kind are issued at their original face value, maturity and coupon rate, but sold at the current market price.
The new funds will allow Ukraine Railways to finance the rehabilitation of priority railway lines, predominantly along the Trans-European Transport Network. They will create financial headroom, together with further improvement in UZ’s financial performance, to support the company’s strategic investment plans.
UZ owns a total track length of over 23,000 km, making it the 14th-largest railway company in the world. It is the world’s sixth-largest rail passenger transporter and seventh-largest freight transporter. It provides for more than 37 per cent of the country’s passenger traffic.
The EBRD and Ukraine Railways are longstanding partners. The Bank successfully co-financed the electrification of the Dolynska-Mykolaiv-Kolosivka line with €150 million and the renewal of the cargo fleet with the acquisition of up to 6,500 freight cars. The EBRD committed €150 million to the total cost of €260 million.
In addition, the EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost €13.6 billion through 432 projects in the country.