The European Bank for Reconstruction and Development (EBRD) is reallocating part of its existing sovereign loan to the State Agency for Restoration and Development of Infrastructure of Ukraine.
With the total €267 million reallocated, the EBRD will fund emergency repairs on sections of the M-06 road heading west from Kyiv towards the Slovak and Hungarian borders, and commit the loan’s second tranche of €160 million. The project incorporates new road safety and climate mitigation measures. Work will be on road sections in Kyiv, Rivne and Zhytomyr regions.
The 2020 loan for €450 million, was originally intended to finance improvements to the road from Kyiv to the southern port of Odesa. But Russia’s war on Ukraine has prompted a re-assessment of priorities following the redirection of cargo and passenger flows via land routes connecting Ukraine to the EU, over the country’s western border.
In 2023, the Bank reallocated the first tranche of the loan towards a new project component involving the rehabilitation of the M-09 road section between Lviv and Rava-Ruska, on the Polish border.
Both roads are part of the Trans-European Transport Network (TEN-T), on which traffic has increased significantly since the beginning of the war.
The road repairs will enhance existing transport links between Ukraine and its EU neighbours, as well as within Ukraine, and reduce the logistical costs of freight traffic. The upgraded road will facilitate the export and import of vital goods, in line with the Solidarity Lanes initiative and in response to the Russian war on Ukraine. The project includes measures to strengthen governance and procurement procedures.
“The war has put the Ukrainian transportation system under enormous stress, including the blockade of seaports, closure of airspace, rail capacity constraints and continuing attacks on key infrastructure networks,” said Nandita Parshad, EBRD Managing Director, Sustainable Infrastructure Group. “It is absolutely vital to keep major roads operational to support Ukraine’s economy and supply chains.”
“The M-06 road has become one of the most important routes for passenger and cargo traffic. Its condition has deteriorated due to increased use, the impact of heavy cargo, and damage resulting from the Russian invasion. The road now urgently needs restoration work and safety improvements. We are delighted to step in,” said Arvid Tuerkner, EBRD Managing Director, Ukraine and Moldova.
