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Republic of Moldova receives European Union money for modern railways

Republic of Moldova receives European Union money for modern railways

A recent decision by the European Investment Bank (EIB) will grant the Republic of Moldova a loan to improve the country’s railway network.

Following a recent decision by the European Union’s EIB, the Eastern European nation of Moldova will benefit from a loan, meant to be used for a more modern railway transport infrastructure. The Bank has promised Moldova 50 million Euro (1,1 billion MDL), which the country will use to improve its rail infrastructure and rolling stock. This recent loan is the first intended for the country’s rail sector. It’s also an important step towards the goals of the EU-Moldova Association Agreement.

A project meant for modern transport

The investment is meant to help the country improve. Thanks to this, Moldova will be able to buy diesel locomotives, which will replace some of the older models still running. Also needed will be the maintenance equipment. Besides, State Railway officials hope to repair and replace parts of the rail infrastructure, sections that EIB claims are ‘long overdue’. The sections to be rehabilitated are partially included in the extended TEN-T network.

Helping the cargo transport industry is just one of the aspects of this rail project. Passenger trains will also benefit from lower pollution levels, less greenhouse gases and lower noise levels. In addition, the increase of passenger safety and operational speeds will bring more paying customers. Finally, having a new and improved network also means lower costs for operating and maintaining the vehicles and the infrastructure.

Various sources for financing

This EIB loan comes to aid Moldova, along with other financial means from the European Union and the European Bank for Reconstruction and Development (EBRD). The EBRD is actually co-financing the rail project, along with the EIB, while the EU offered an additional 5 million Euro (110 million MDL). In the end, thanks to this project and others alike, authorities hope to restructure the network in such a way as to make the railway sector a true competitor in the transport industry. As a result, the country would be able to increase its exports and help meet the demands of local and international businesses, both in the EU and in the Eastern countries.

A positive impact on the environment

Besides helping business partners and the country’s economy, improving the railway network will keep cargo off the roads. This, in turn, will help protect the environment, as studies have repeatedly shown that rail transport is better for the environment than using road vehicles.

The Moldovan Railway Network

The Moldovan Railways Company is a state-run institution used to transport people and cargo. The total length of the network under the company’s control measures 1.232 km. However, most of the network still uses the large gauge of 1.520 millimeters, with just 14 km using the standard style of 1.435 millimeters. The country had to switch to the larger gauge back in 1945, following the separation from its now neighbor Romania. In 2014 the company had 10.303 employees.