Moldovan Railways Restructuring Project



Project number:


Business sector:


Notice type:


Environmental category:


Target board date:

29 Oct 2014



PSD disclosed:

17 Oct 2012

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing a sovereign loan to the Government of Moldova, to be on-lent to Calea Ferata din Moldova (CFM, the national railway operator) to finance (i) the acquisition of new multi-purpose locomotives to offer a higher level of service quality, safety and energy efficiency benefits  and (ii) conducting priority investments in rail infrastructure rehabilitation and related supervision services. 
The Project shall also aim to support the railway restructuring reform process, through:
(a) providing support to institutional reform to improve transparency and accountability, as well as financial sustainability;
(b) providing support for the initial planning and implementation stages of a phased retrenchment programme; and
(c) providing sustainability support by improving environmental and health and safety aspects, and applying energy efficient technologies and standards and encouraging lower emission modes to reduce energy consumption.

Transition Impact

Transition impact would stem from support by the EBRD of the Government of Moldova and CFM’s efforts to reform the railway sector, through:
  • formalising CFM’s restructuring plan to improve the financial performance and sustainability of the railway;
  • the separation of the freight, passenger, and infrastructure businesses, and improving cost recovery; and
  • reduction of energy consumption/costs following a dedicated energy efficiency audit of CFM.  CFM is one of the largest energy consumers in Moldova so energy efficiency measures will have a considerable demonstration effect among the main energy users in the country.

The Client

The loan will be made to the Government of Moldova with CFM as the end beneficiary.

EBRD Finance

Sovereign loan of up to EUR 52.5 million, tranched.

Project Cost

Up to EUR 116.5 million.
The project is expected to benefit from an investment grant provided by the Neighbourhood Investment Facility of the European Commission for the acquisition of locomotives in the amount of up to EUR 5 million.
The project is expected to be co-financed with the European Investment Bank.

Environmental Impact

Categorised B. Environmental and social due diligence comprised a corporate environmental, health and safety (EHS) audit of CFM and an audit of CFM’s Human Resources (HR) capacity, systems and current retrenchment planning. As part of the restructuring programme, the Bank is planning to provide technical cooperation support for the development of a corporate EHS system based on ISO 14001 and OHSAS 18001 standards.   The Bank will also provide technical cooperation support for the development of a retrenchment plan. The introduction of new locomotives is expected to result in improved fuel efficiency, reduced pollution and better safety compared with the existing fleet. The infrastructure rehabilitation is expected to involve primarily the replacement of track and ballast within the existing corridor. The associated environmental and social impacts can be addressed through appropriate contractor management and stakeholder engagement. An Environmental and Social Action Plan will be agreed with CFM for each investment component  in line with EBRD requirements.

Technical Cooperation

The EBRD will support the preparation of railway reform strategies by mobilising technical cooperation funding for consulting services, as follows:
  • Restructuring Support - EUR 650,000 (EBRD Shareholder Special Fund);
  • Assistance in preparation and implementation of tender - EUR 250,000 (Central European Initiative);
  • Capacity Building on Energy Efficiency Management - EUR 220,000 (the Czech Official Development Assistance Fund);
  • Environmental, Health and Safety Management Support and Capacity Building - EUR 73,000 (Central European Initiative);
  • Retrenchment Planning - EUR 65,000 (EBRD Shareholder Special Fund).
An implementation of an energy management information system is expected to be co-funded through the EBRD Shareholder Special Fund.

Business opportunities

For business opportunities or procurement, contact the client company.

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General enquiries

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Tel: +44 20 7338 7168

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