EBRD to give 300-mln-euro loan to Ukrainian Railways for renewal of electric locomotives

MOSCOW. Aug 15 (Interfax) - The European Bank for Reconstruction and Development (EBRD) plans to provide the Ukrainian state railway company Ukrzaliznytsia (Ukrainian Railways, or UZ) with a 300 mln-euro state-guaranteed loan for the renewal of the electric locomotive fleet, Ukrainian media said, citing the EBRD.

"The emergency investment program will help meet the company's urgent needs to renew its rolling stock and ensure the continuity of its operations," the press release said.

The loan may be divided into tranches: the first confirmed for up to 120 million euros and the second for up to 180 million euros, depending on the project implementation period.

The loan will be provided for 18 years, including a grace period of up to 4 years for repayment of the principal debt, the press release said.

The project aimed to renew the locomotive fleet of Ukrainian Railways is due to be supported by a parallel grant from the U.S. government of up to $195 million, which will be administered by the World Bank through the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) under the Repairing Essential Logistics Infrastructure and Network Connectivity (RELINC) project.

The project, worth a total of 478.3 million euros, has been assessed and is awaiting final review. According to the EBRD website, the EBRD Board of Directors plans to review it on October 22.

A substantial number of the company's electric locomotives will soon be decommissioned because of wear and corrosion, which reduces the company's ability to meet market demand for rail transport services, the press release said.