RAILWAY INFRASTRUCTURES MAKE PROGRESS ON THE CONTINENT. THESE PLANS FOR A MODERN AND SUSTAINABLE TRANSPORT NETWORK ARE SUPPORTED BY FINANCIAL INSTITUTIONS SUCH AS THE EUROPEAN INVESTMENT BANK (EIB) AND THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD).
One of the continents where the railway becomes more prominent is Europe. On the one hand, work is being carried out on the implementation of trans-European transport networks (TEN-T), co-funded by the European Union and the Member States, to promote the movement of people and goods.
On the other hand, the aim is to find a more sustainable mobility, in line with the objectives of the European Green Deal. In this sense, actions are increased in the modernization and expansion of urban transport with metros, commuter trains, trams or tram-train; in addition to committing to a more efficient freight supply chain and the implementation of innovative technologies and equipment.
In both cases, there is a collaboration of financial institutions such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development for the completion of projects with the optimization of the necessary funds.
EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD)
Established in 1991, it has 67 members including China and two multilateral institutions (the European Union and the European Investment Bank). Its main mission is to support the transition to the market economy in Central and Eastern Europe, Central Asia, Mongolia and in the Southern and Eastern Mediterranean region (Egypt, Morocco, Jordan and Tunisia) through the funding of projects in the private sector (96%) and, to a lesser degree, in the public one. In total, it operates in 38 economies on three continents.
In terms of transport, it acts to achieve efficient, safe and reliable systems. The EBRD is involved in the modernization of Ukraine’s railways, the reconstruction of Kosovo’s network (2015), the acquisition of electric locomotives in Moldova (2020) and the rolling stock for the Tbilisi metro (Georgia), among many other projects.
“Sustainable mobility plans are supported by agents such as IFIs”.
EUROPEAN INVESTMENT BANK (EIB)
The Luxembourg-based European Investment Bank (EIB) jointly owned by the member states of the Union works to strengthen the EU economic and social cohesion.
The EIB secures its funding in the international capital markets via bond issuance. It is the world’s largest supranational lender and has the best rating agency score. In addition, it provides assistance in attracting other investors, whether international financial institutions, public or private banks.
Another of its function consists of the quasi-equity operations, holdings and venture capital fund investments. The EIB has the possibility to combine different financial instruments for the same project as well as provide technical assistance.
The projects financed by the EIB should contribute to the achievement of the EU’s objectives and must be economically, financially, technically and environmentally viable.
The Union’s ‘climate bank’
Since its foundation in 1958, the EIB has supported the implementation of numerous transport networks and it currently plays an important role in transforming mobility with low-carbon emissions.
To this end, it is committed to increasing the percentage of investments as part of its priority “climate action and environmental sustainability” to reach 50% by 2025. For this reason, its lending policy will give priority to energy efficiency for decarbonisation and electromobilisation with the aim of achieving a 32% share of renewable energy across the Union by 2030.
Support for sustainable modes of transport, such as railway, is closely linked to these objectives, as it is the most environmentally friendly. Hence it is one of the core element of its performance.
The proportion of sustainable transport projects has steadily increased in recent years and now accounts for more than 5.5 billion euros in the EU in 2019, more than half of the loans in this sector.
In 2019, the EIB signed agreements totalling 10.5 billion euros for 81 new transport projects within the European Union. Together with investments in transport infrastructure, such as railways, roads, airports and ports, to develop the Trans-European Transport Network (TEN-T) and the metro and tram lines, as well as bus fleets that use electric and alternative fuels.
In addition to its work in Europe, it also funds projects in other countries. For example, this year it will invest 650 million euros in the construction of a railway service for the city of Kanpur in India. Among the most recent activities, in 2020 it has taken out a corporate bond with Trenitalia to acquire the first 43 trains out of a total of 135 units, it has also collaborated with the refurbishment of locomotives in Moldova.
It has also designated funds for the construction of the Mediterranean Corridor, to buy trains to carry out maintenance work on the Spanish High-Speed network or for the purchase of commuter trains by Renfe Operadora. In the area of R&D, it funds activities for the development of new technological solutions for airlines, airports, travel agencies and railways.
Over the years it has granted aid to many other initiatives such as the Basque Y, Barcelona’s Metro and Madrid’s Metro, to the modernization of networks in Ukraine, Slovakia, etc.