The government plans to secure a 29-year loan to stabilize passenger rail routes
The Ministry for Restoration, Infrastructure and Transport of Ukraine is developing a five-year support program for passenger rail transportation with the assistance of the World Bank. The state plans to attract 500 million dollars annually to develop this sector. This was reported by Railinsider citing Volodymyr Shemaiev, according to the portal PromPolitInform.
The project provides for the implementation of a Public Service Obligation (PSO) funding mechanism. According to Deputy Minister Volodymyr Shemaiev, such a tool will allow for more predictable state orders for railway services and ensure the stability of the sector during its ongoing reform.
Loan parameters
As part of the initiative, the ministry is considering the possibility of obtaining concessional loans for the Ministry of Finance. It is expected that the loan repayment period will be 29 years. Annual funding for this area is estimated at approximately 500 million dollars.
Implementation timeline
The structuring of the project is planned to be completed by the end of 2026. The official also specified that the preparation of the first payment is intended to be carried out before the beginning of 2027, based on guarantees from the government of Japan.
Currently, the final terms of the funding, detailed mechanisms for distributing the funds across project periods, and the procedures for interaction with international donors remain under consideration. The PSO model is aimed at supporting only those passenger transport services defined as socially important, rather than financing the entire network infrastructure.
Illustrative photo: CEphoto, Uwe Aranas / CC BY-SA 3.0
Read also: Support for Ukraine, walkout for Russia: Andriy Pyshnyi summarizes NBU participation in IMF meetings
