An investment programme by rail transport company Ukraine Railways (UZ) is to receive a major boost in the form of a US$ 150 million senior loan from the EBRD. The loan will be used to acquire up to 6,500 general purpose open freight gondola-type wagons through an open international tender.
The investment programme will help to maintain the UZ’s capacity, significantly improve its efficiency and reduce greenhouse gas emissions produced by its operations. Carbon dioxide emissions are expected to fall by up to 80,000 tonnes a year? thanks to the new rolling stock.
The financing will be combined with corporate governance reforms at UZ and its subsidiaries. The development and implementation of a Corporate Governance Action Plan and an Anti-Corruption Action Plan will introduce measures such as the appointment of independent directors, business planning, the establishment of an audit committee, an internal audit function and anti-corruption measures, making it a benchmark for other state-owned enterprises in Ukraine.
The EBRD will also assist UZ in certifying and improving its procurement processes and implementing an energy management information system, which will lead to better overall efficiency of UZ. This will be funded by the EBRD Shareholder Special Fund.
Upgrading and modernising Ukraine’s freight railway fleet is a major contributor to strengthening the country’s regional and international integration. UZ possesses a total track length of over 23,000 km, making it the 14th largest in the world. It is the world’s 6th largest rail passenger transporter and the world’s 7th largest freight transporter. The EBRD has supported the transformation of the state-owned enterprise into a commercially-run corporate.
The EBRD is the largest international financial investor in Ukraine. To date the Bank has made a cumulative commitment of almost €12.1 billion across some 400 projects since it started operating in the country in 1993.
