A 13-billion EIB loan will strengthen safety and capacity of Czech railways24/7/2024|Press releasesThe European Investment Bank (EIB) signed a loan agreement with the Ministry of Finance of the Czech Republic in the amount of CZK 13 billion (EUR 527 million) for extensive modernisation of the railway network. The loan is part of an EIB operation worth CZK 48.8 billion (EUR 2 billion), intended for increasing the capacity of Czech freight and passenger rail transport while ensuring greater safety and comfort. The funding shall improve rail lines across the country and strengthen the Trans-European Transport Network (TEN-T) by building three main corridors across the country. The EIB and the Ministry of Finance of the Czech Republic signed a loan agreement in the amount of CZK 13 billion for the modernisation of the Czech railway network, thus releasing the second part of the EIB support planned in the total amount of CZK 48.8 billion. The funds will support the modernisation of the TEN-T railway network in the Czech Republic and enable the introduction of the European Rail Traffic Management System (ERTMS). The project management will be entrusted to Správa železnic, the national railway infrastructure manager, which is subordinated to the Ministry of Transport of the Czech Republic. The first part of the loan amounting to CZK 24 billion was approved in the autumn of 2023. These additional funds allow Správa železnic to continue with the ERTMS deployment. This rail traffic control system is mandatory in the European Union and also significantly reduces the risk of human error and accidents. Other benefits of the system include an increase in rail capacity, opening up more options for travel, as well as lower operating and maintenance costs, mainly due to electricity savings. In terms of safety, upgraded level crossings could reduce the number of incidents by up to 180 per year and prevent 30 to 40 deaths each year. Správa železnic plans to install barriers at level crossings or replace them with bridges or tunnels. This allows cars, bicycles or pedestrians to cross the rail line without having to drive or step directly onto the tracks. "Rail is one of the most energy-efficient modes of freight and passenger transport and we need to expand it," said EIB Vice-President Kyriacos Kakouris. "But if we want people and businesses to prefer rail over road, trains need to be safer, greener and more reliable. Our financial support for the Czech rail system brings the dual benefit of leading to more sustainable transport in the country and supporting regional development in areas of the European Union with lower economic activity." The project also adapts stations and railway buildings to make them more accessible to people with reduced mobility and passengers with children. It consists of nearly 40 sub-projects to be completed by the end of 2028. Approximately a quarter of the modernisation projects are planned in the Prague region, but most of them are still situated in placed covered by EU cohesion policy. When completed, the project will benefit approximately 90 million passengers per year and open the way for the transport of more than 8 million tonnes of freight. "The EIB plays a key role in financing transport infrastructure in the Czech Republic. The first agreement between the Bank and the Czech government was signed in 2001 and since then the EIB has been involved in a number of major projects. I very much appreciate the cooperation with the EIB, thanks to which we can finance some long-term investments of a strategic nature through a loan with a lower interest rate than we would obtain on the market with a standard issue of government bonds," said finance minister Zbyněk Stanjura. "Modernisation and increased capacity of the railway infrastructure is one of the main priorities of our government, but the necessity for investments unfortunately exceeds the limits of our national budget. The European Investment Bank loan will help us move faster and on a much larger scale, so that the quality of our rail network for the transport of passengers and goods improves further. In view of the upcoming construction of the high-speed rail system, we want to cooperate with this institution in the long term," said transport minister Martin Kupka. Under the memorandum signed, the EIB committed to provide technical assistance and financial support of up to EUR 7 billion to the Czech railway network manager. The preparation of several ongoing sub-projects has been supported by a partnership between the European Commission and the European Investment Bank JASPERS. This initiative helps project owners meet EU standards and have a better chance of getting EU funding. The modernisation of rail lines will increase the maximum speed and capacity of the sections belonging to the TEN-T network. The investment will support the implementation of the transport policy of the Czech Republic set for the period 2021 to 2027. Its vision is an energy-efficient transport system that is resilient to climate change and has zero impact on the environment. Shifting passenger and freight traffic from roads to rail would reduce noise, pollution and CO2 emissions. Basic information The Czech railway network has 9,463 kilometres of main lines, of which approximately one third are electrified. With the exception of the period affected by the covid-19 pandemic, the number of people using train services has been steadily growing. Improvements in rail infrastructure and rolling stock are probably contributing to this, reducing journey times on many lines. The popularity of rail transport in the country has also increased thanks to new international connections to Austria and Slovakia and thanks to increased competition for train services. ABOUT THE EIB The European Investment Bank is a European Union institution specialising in long-term lending. It supports meaningful investments that contribute to EU policy objectives and works closely with other EU institutions to promote common policy priorities such as fair growth and a just transition to climate neutrality. In 2023 alone, the EIB Group released for Czech projects a total of EUR 1.88 billion to the Czech Republic.