A sovereign guaranteed loan of up to EUR 200 million, consisting of EUR 100 million to provide emergency capex financing to the JSC "Ukrainian Railways" (the "Company" or "UZ") and EUR 100 million to provide capital structure support (the "Project"). The loan will facilitate the expansion of the cross-border capacity and improve railway connectivity corridors with EU, address border crossing bottlenecks and mitigate war impact through rehabilitation of the relevant railway sections and other critical infrastructure investments. The EBRD loan is expected to be supported by the G7/EU guarantees of up to 50%.
The Project will support the Company in addressing immediate critical needs to improve operations and ensure improved connectivity with EU, continue to provide vital services to people and businesses/private sector, maintaine logistics of key Ukrainian exports (including agricultural products) and critical imports. The financing would allow UZ to rehabilitate the key railway corridors on the border with EU and procure the rolling stock thereby providing a comprehensive solution for the Company to expand capacity on these rail corridors.
ETI score: 70
The Project aims to support the resilience of the Company and its operations as well as to maintain and improve exports and imports logistics by providing emergency financial support to UZ, funding critical investments in the Company's infrastructure, including its vast network, operating fleet and supporting infrastructure (Resilient). The proposed project will ensure ongoing access to logistic services for people and business in Ukraine critical in the current war environment (Inclusive).
UKRAINIAN RAILWAYS PJSC
Ukrainian Railways PJSC is a vertically-integrated railway company fully owned by the Government of Ukraine.
EBRD Finance Summary
Total Project Cost
EBRD is offering financing which is not available in the market due to the ongoing war and high level of risk and uncertainty in Ukraine. The loan is also expected to benefit from the "donor funded" guarantee to be provided by the G7/EU to cover 50% of exposure, where local commercial financiers cannot provide such risk-sharing mechanism. EBRD funding and application of Bank's PPR will ensure wider market outreach, particularly in the current high-risk environment.
Environmental and Social Summary
Categorised B (2019 ESP) and Low-Medium risk. The borrower is an existing Client to the Bank with satisfactory performance and this is a brownfield project that includes rehabilitation of the existing railway sections located in Western Ukraine and procurement of rolling stock. Potential environmental and social risks will be limited mainly to the construction stage and can be readily identified and addressed though the application of good international practices and standards. Social risks potentially refer to occupational health and safety, and labour issues during the construction phase and in supply chain. All risks are expected to be addressed by the Client through appropriate mitigation measures. Environment and social due diligence (ESDD) will be undertaken by independent E&S consultants as part of the Feasibility study and will review potential E&S impacts related to the existing performance and construction practices and will utilise the ESDD tools developed by ESD for the response to the impacts of war on Ukraine. Where possible the ESDD will explore opportunities how to address war related challenges and enhance E&S management system of the Company through the technical cooperation support and mitigation measures in the E&S action plan. The project is aligned for Paris alignment mitigation and adaptation.
Technical Cooperation and Grant Financing
TC 1: Feasibility Study.
TC 2: Environmental and Social Due Diligence.
TC 3: Project Implementation Support. The TC will support the Client with preparation of procurement documentation, carrying out the tender and contract implementation.
Company Contact Information
Volodymyr Shemayev, Director of Office for International Projects
5 J.Giedrozc St, Office 208, Kyiv, 03150 Ukraine
PSD last updated
07 Mar 2023
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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