The key components of this railway project are: (i) renewal of approximately 155 km of main-line railway track on Corridor IX; (ii) creation and implementation of a comprehensive restructuring plan of the rail sector in Lithuania.
The key project objectives are to:
- retain and improve the competitiveness of Lithuania’s main freight transit routes from the CIS to the port of Klaipeda and to Kaliningrad;
- support the development of the Lithuanian rail sector into a commercially focused industry, organised according to European Union directives and established on a sound financial basis.
The transition impact is very high as the project is expected to:
- enhance western Europe–Russia transit trade;
- promote intermodal competition for the provision of cost-effective freight transport;
- improve LG efficiency by introducing greater competition with neighbouring railways for transit freight traffic; and
- foster private sector involvement.
Lietuvos Gelezinkeliai (LG – Lithuanian Railways) is a joint-stock company fully owned by the Republic of Lithuania. LG’s core activities are infrastructure management and freight/passenger transport. LG operates a network of about 2,000 km and employs approximately 16,000 staff.
Loan financing totalling US$ 54 million. The project was structured in cooperation with the European Union’s Instrument for Structural Policies for Pre-Accession (ISPA) fund, which is contemplating a financial contribution of US$ 41 million in parallel financing. No co-financing is expected from commercial banks or export credit agencies.
US$ 54 million (€ 57 million).
The project was screened B/0 requiring an environmental analysis. The analysis was carried out by international consultants appointed by the Bank and it revealed that there are no serious environmental issues associated with this project. Overall the track replacement programme is likely to have a positive environmental impact by reducing the incidence of derailments, and hence potential contamination, particularly from oil based compounds. An Environmental Action Plan (EAP) has been agreed and will be covenanted within the Loan agreement. A member of the Bank's Technical Cooperation fund financed Project Implementation Unit will be responsible for ensuring the timely implementation of the EAP.
The project will benefit from EU Phare TC funding.
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