The Czech Republic is set to take its highest-ever loan from the European Investment Bank. With a 24 billion Czech koruna loan, the country plans to modernize its railways by 2027. The Ministry of Finance has signed an agreement with the bank, and the funds will be allocated to forty different projects.
“Financing from multiple sources is the right choice,” said Martin Kupka, the Minister of Transport. He added that thanks to the loan from the European Investment Bank, the Czech Republic can access additional funding, including support from the European Union. “We will use the funds, for example, to modernize Prague’s Masaryk Station and important routes near the capital, between Karlštejn and Beroun,” he said.
The funds for the railway will be managed through the Railway Administration. They will improve level crossing safety, enhance cyber security measures, and make necessary infrastructure modifications to stations and railway buildings. According to the bank, the modernization will increase the maximum speed and capacity of sections of the Trans-European Transport Network, leading to better transportation connections between regions of the European Union.
Given the current state budget deficit, Zbyněk Stanjura, the Minister of Finance, considers the loan to be the most efficient way to acquire funds. “Through a favorable loan from the European Investment Bank with a lower interest rate, we can finance long-term investments of strategic importance, while the funds from the state budget can be used for other priorities,” stated Stanjura.
Vice President of the bank, Kris Peeters, expects that improving rail services’ quality will help shift from road to rail transportation, reducing negative environmental impacts.
Many European countries are focusing on the development of their railway networks. France and Italy, for example, are considering integrating their high-speed rail systems.