EIB and Czech Ministry of Finance Sign CZK 13 Billion Loan to Enhance Rail Network

Managed by Správa železnic, s.o., under the Czech Ministry of Transport, the project builds on the first loan of CZK 24 billion signed in autumn 2023.

The European Investment Bank (EIB) and the Czech Ministry of Finance have signed a CZK 13 billion loan agreement aimed at upgrading the Czech Republic’s rail network. This marks the second phase of the EIB’s planned support for the country’s railway infrastructure, with total funding amounting to CZK 48.8 billion. The project will focus on improving the Trans-European Transport Network (TEN-T) railway lines and implementing the European Rail Traffic Management System (ERTMS).

Managed by Správa železnic, s.o., under the Czech Ministry of Transport, the project builds on the first loan of CZK 24 billion signed in autumn 2023. The latest financing will facilitate the installation of ERTMS, a mandatory rail traffic management system in the European Union that enhances safety by significantly reducing human error and accidents. Additionally, ERTMS is expected to increase railway capacity, reduce operating and maintenance costs, and provide more travel options.

Modernizing railway crossings is a key component of the project, aiming to prevent up to 180 incidents and 30-40 fatalities annually. Správa železnic plans to install barriers or replace level crossings with bridges or tunnels to ensure safe crossings for cars, bikes, and pedestrians.

“Rail is among the most energy-efficient modes of transport for freight and passengers, and we need more of it,” said EIB Vice-President Kyriacos Kakouris. “Our financing for the Czech railway system will make transport options more sustainable and support regional development in EU areas with lower economic activity.”

The project includes upgrades to railway stations and buildings to improve accessibility for people with reduced mobility and travelers with children. It encompasses approximately 40 sub-projects scheduled for completion by the end of 2028, benefiting around 90 million passengers and facilitating the transport of over 8 million tonnes of freight annually. While a quarter of the upgrades will occur in the Prague region, most will be in areas covered by EU cohesion policy.

“The EIB has played a crucial role in financing transport infrastructure in the Czech Republic,” said Minister of Finance Zbyněk Stanjura. “This long-lasting cooperation allows us to finance strategic long-term investments at lower interest rates than standard bond issuance.”

Czech Minister of Transport Martin Kupka highlighted the government's prioritization of railway infrastructure modernization and capacity expansion. He acknowledged that the EIB loan would enable faster and more extensive progress, particularly with plans for high-speed railways.

This facility builds on a 2022 Memorandum of Understanding between the EIB and the Czech government, wherein the EIB committed to providing up to €7 billion in financing and technical assistance. Several current sub-projects were developed with the support of JASPERS, a European Commission-EIB partnership, to align with EU standards and secure EU funding.

Upgrading the railway lines will enhance speeds and capacity on TEN-T network sections, supporting the Czech Republic's 2021-2027 transport policy framework. This investment aims to create an energy-efficient, climate-resilient transport system with minimal environmental impact, shifting passenger and freight transport from roads to rail, thereby reducing noise, pollution, and CO2 emissions.