EU, EIB, and Ukraine Invest €50M to Modernize Rail Borders and Boost Trade Links

The €50 million package is backed by an EU guarantee under the Ukraine Facility and co-funded through a grant from the European Union’s Connecting Europe Facility (CEF).

In a major step towards deepening Ukraine’s economic and infrastructural integration with the European Union, the European Investment Bank (EIB) and the Ukrainian government have agreed to allocate €50 million in financing to modernize key railway border crossing points. This strategic investment will be channeled to Ukrainian Railways (Ukrzaliznytsia) to upgrade rail infrastructure connecting Ukraine with its western neighbors—Poland, Slovakia, Hungary, and Romania.

The funding agreement, signed between the EIB and the Ministry for Development of Communities and Territories of Ukraine, is part of a broader initiative to bolster the EU-Ukraine Solidarity Lanes. These corridors are critical to maintaining trade routes and ensuring cross-border connectivity, particularly amid the ongoing geopolitical crisis triggered by Russia’s full-scale invasion of Ukraine.

The €50 million package is backed by an EU guarantee under the Ukraine Facility and co-funded through a grant from the European Union’s Connecting Europe Facility (CEF). Additionally, the project is receiving technical and advisory support under JASPERS (Joint Assistance to Support Projects in European Regions), a collaborative initiative between the European Commission and the EIB.

Critical Infrastructure Improvements

The scope of work under the new investment includes extensive modernization of rail infrastructure near border areas. This covers:

• Reconstruction and modernization of rail border crossing points

• Repair and replacement of worn-out railway tracks

• Relocation and modernization of wagon inspection facilities

• Development of an intermodal terminal to enhance freight handling capacity

• Installation of specialized equipment such as cranes to facilitate logistics operations

These upgrades are expected to significantly boost the capacity and efficiency of cross-border freight transport while also improving conditions for passenger rail services. Faster, safer, and more reliable rail connections will not only facilitate trade but also enhance the mobility of people between Ukraine and the European Union.

Strategic Support Amid Wartime Challenges

This investment is a continuation of the EIB’s €150 million package aimed at strengthening Ukraine’s railway sector. In 2022, the EIB provided an initial €100 million to fund emergency repairs and ensure the continuation of essential rail services during the war. This was complemented by a €6.7 million EU grant addressing Ukraine’s urgent wartime logistics needs.

Speaking at the signing ceremony, EIB Vice-President Teresa Czerwińska, who oversees the Bank’s activities in Ukraine, emphasized the significance of the project:

“The EIB has been a long-standing partner of Ukrzaliznytsia – from well before the very first days of the war. With this new support, we are continuing to strengthen Ukraine’s railway infrastructure at a critical time. Upgrading border crossing points and key rail links will help remove bottlenecks, accelerate the flow of goods and support Ukraine’s deeper integration with the European Union.”

Echoing this sentiment, European Commissioner for Enlargement Marta Kos underlined the political and economic relevance of the investment:

“Today’s agreement between the European Investment Bank and Ukraine is another step towards Ukraine’s gradual integration into the EU. This €50 million investment in the modernisation of key rail border crossing points will strengthen Ukraine’s infrastructure and its connections to the European Union. This is not just an economic measure—it is a political commitment to bring Ukraine even closer to the EU by improving trade, people mobility and transport links.”

A Lifeline for Ukraine’s Economy and Future

As the war continues to place pressure on Ukraine’s economy and infrastructure, investments in resilient and sustainable logistics networks have become increasingly critical. The railway system, in particular, has played a central role in moving goods, transporting aid, and maintaining vital connections with the rest of Europe.

Deputy Prime Minister for Restoration of Ukraine and Minister for Development of Communities and Territories Oleksii Kuleba expressed his appreciation for the continued support:

“Railway infrastructure has become one of Ukraine’s key lifelines – keeping goods moving, delivering essential services and ensuring strategic links with the European Union. We welcome this €50 million in EIB support, now directed towards upgrading our rail border crossing points. This is a vital step in rebuilding and expanding our border infrastructure. It will unlock new potential for freight flows and bring us even closer to full integration with the European Union.”

Looking Ahead

The current €50 million agreement is not just a standalone initiative but part of a broader and long-term partnership between Ukraine and its European allies. As Ukraine continues its journey toward EU integration, strengthening transport and trade infrastructure will be essential—not only for immediate recovery and economic resilience but also for aligning with European standards and networks in the future.

This modernisation project marks a critical step in ensuring that Ukraine’s railways can handle increased volumes of goods and passengers, support post-war recovery, and lay the groundwork for eventual EU membership.