EIB Global invests €41.2 million in Moldova’s railway infrastructure rehabilitation

• The loan will be complemented by a €12 million EU grant to improve internal connectivity and bring long-term economic benefits to the whole region.
• The project includes refurbishing 128 km of the vital north-south rail corridor in Moldova, so facilitating trade and movement between Moldova, Ukraine and Europe, which is of particular importance in the context of the EU’s Solidarity Lanes initiative.
• The project will help reduce road congestion and enhance environmental sustainability, in accordance with the EU’s Global Gateway goals.

The specialised development finance arm of the European Investment Bank (EIB) — EIB Global — has signed a €41.2 million loan agreement with the government of Moldova to rehabilitate the country’s railway infrastructure. Complemented by a €12 million EU investment grant, announced at the Global Gateway Forum earlier this year, this investment will improve Moldova’s internal connectivity and offer a crucial export route for Ukraine, fostering regional stability and economic resilience.

The project’s central point is the rehabilitation of Moldova’s north-south rail corridor. Of its total length of 370 km, approximately 128 km will be rehabilitated, including the replacement of 50 switches at stations. This corridor serves as a vital link from western Ukraine to key ports along the Danube and Prut Rivers, providing access to international waters. The enhancement of the existing railway connection between Moldova and Ukraine is designed to stimulate trade, promising significant benefits for Ukrainian exports and the Moldovan economy, especially in the context of the EU-Ukraine Solidarity Lanes initiative.

The project will be implemented by the Moldovan railway operator Calea Ferată din Moldova and will cover the rehabilitation of railway infrastructure on Moldova’s Vălcineț-Ungheni-Chișinău-Căinari corridor. This effort is part of an overarching countrywide reform to improve the existing rail infrastructure and bring Moldova’s railway network in line with EU standards and practices in the longer term.

This initiative will ease road and border traffic by shifting freight from trucks to railways, enhancing mobility and reducing environmental impact. It aligns with the EU Global Gateway’s focus on sustainable transport, contributing to greener, more efficient logistics.

Moldovan Minister of Finance Petru Rotaru said: “The implementation of the project will result in several benefits such as reducing the duration of railway journeys, increasing the market share of the railway transport for large tonnage and gauge goods, reducing the load on road infrastructure, minimizing road wear and tear, and enhancing road traffic safety.”

EIB Vice-President Teresa Czerwińska, who is in charge of operations in Moldova, said: “As Moldova becomes a critical hub for trade and transit, improving its transport infrastructure is vital. I am delighted that our investment will help strengthen the resilience of Moldova’s rail network and improve its connectivity with Ukraine and Europe, so bringing considerable economic advantages. Given Moldova’s EU integration aspirations, we are firmly committed to assisting the country in aligning its systems and infrastructure with EU standards, thus facilitating its deeper integration into the EU market and supporting its path towards EU accession. Moldova can rely on the EU bank for both financial and technical support in enhancing its infrastructure with quality projects.”

Ambassador of the European Union to the Republic of Moldova Jānis Mažeiks said: “This investment will strengthen the resilience of Moldovan railway infrastructure, improve Moldova’s connectivity with Ukraine and Europe, and benefit the Moldovan economy. As Moldova becomes an integral part of the trans-European transport system (circulation of goods, people and services), upgrading the country’s transport infrastructure is imperative. In the context of Moldova’s candidacy role and its aspirations to join the European Union, we will continue to support the country and upgrade all the necessary routes.”

Background information:

EIB Global is the EIB Group’s new specialised arm devoted to increasing the impact of international partnerships and development finance outside the European Union. EIB Global is designed to foster strong, focused partnership within Team Europe and as part of the EU Global Gateway strategy, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.

EIB Global and Moldova: Since establishing its presence in Moldova in 2007, the EIB has channelled over €1.19 billion into 33 projects, backing EU policy objectives across multiple sectors, such as transport, energy, SMEs, agriculture and municipal infrastructure. 2022 was a record year for the EIB in Moldova, with €250 million worth of new loans signed with the public sector. 2023 saw the Bank extend its first corporate loan in Moldova — a $30 million project with Premier Energy Distribution, Moldova’s private electricity distribution system operator, aimed at enhancing the quality and reliability of the electrical power network.

Global Gateway is the European Union’s strategy to reduce the worldwide investment gap, boost smart, clean and secure connections in the digital, energy and transport sectors, and strengthen health, education and research systems. The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States and European development finance institutions. It aims to mobilise up to €300 billion in public and private investments between 2021 and 2027, creating essential links rather than dependencies, and closing the global investment gap.

EU-Ukraine Solidarity Lanes is an initiative developed in response to the challenges faced by Ukraine due to Russia’s full-scale invasion, particularly the blockade of Ukrainian Black Sea ports. These lanes establish alternative logistics routes that use various transport modes, including routes through Moldova, to link the European Union with Ukraine. This initiative, launched by the European Commission in May 2022, aims to facilitate Ukraine’s agricultural exports and bilateral trade with the European Union, which have been severely impacted by the war.