The European Investment Bank (EIB), the lending arm of the European Union, has announced a grant package of €12m ($12.63m) to rehabilitate and modernise two key sections of railway lines in Moldova.

This grant will be funded by the EIB’s Global project, which will also provide a €42m ($44.3m) loan to support Moldova’s railway infrastructure and enhance connectivity across the region.

Implemented by Moldavian rail operator Calea Ferată din Moldova, the project is centred on the rehabilitation of Moldova’s north-south railway route, covering the Valcinet-Ungheni-Chisinau-Cainari corridor.

According to the EIB, the funding will support a crucial export route for Ukrainian grain.

The line links western Ukraine to important Danube and Prut River ports, and thereby international water access.

This improved access will assist the EU-Ukraine Solidarity Lanes initiative, which due to the halting of the Black Sea grain initiative, aims to allow Ukraine to continue exporting.

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By GlobalData

EIB president Werner Hoyer emphasised how the funding package will aid regional connectivity between Moldova and Ukraine: “The €12m contribution to Moldova’s rail infrastructure, to be complemented by an EIB loan, is a sign of the partnership and shared goals between Moldova and the European Union.

“It will improve Moldova’s economic prospects and support regional connectivity with Ukraine in these difficult times. Moldova can count on the EU bank’s financial and technical support to upgrade its infrastructure through quality projects.”

As highlighted by the Institute of Central Europe, the Russian invasion underlined the significance of Ukrainian-Moldovan relations in supporting both nations’ growth and their strategic situation.

Representatives of Moldova’s ruling party frequently stated that they believe the Ukrainian society and its military, whilst defending itself, are equally protecting Moldova’s security and independence.

As reported by our sister site, Army Technology, a joint meeting involving the nations of Ukraine and Moldova was scheduled early this year to address the security situation in the areas and the chances for future cooperation on infrastructure problems.

Prime Minister of the Republic of Moldova Dorin Recean emphasised the economic gains from restoring the north-south rail corridor: “We are grateful to both the EU Commission and the EIB for supporting our efforts in developing a modern and efficient rail network in the Republic of Moldova.

“The rehabilitation of the north-south rail corridor in the country, which is a project of particular importance in the context of the Solidarity Lanes, will bring long-term economic benefits to the whole region. In view of achieving this objective, we further strongly rely on the EIB and EU support.”

In 2007, EIB Global began working with Moldova. Since then it has allocated €1.19bn in financing to 33 projects across several industries.