EBRD signs €54 million loan to keep Ukrainian Railways running through blackouts
The European Bank for Reconstruction and Development signed a €54 million loan agreement with Ukrainian Railways on Tuesday, providing critical funding to keep trains moving across the country as Russian strikes continue to cripple the power grid. The deal, announced April 28, aims to sustain both passenger and freight operations during war-induced blackouts that have repeatedly disrupted transport networks.
War Funding Meets Default Reality
The loan arrives just a day after new sleeper cars rolled into Kyiv, highlighting a stark contrast: Western money continues to flow to the state-owned operator even as it remains in default on previous debts. Ukrainian Railways, the country's primary rail carrier, has been a lifeline for evacuations, military logistics, and civilian travel since the full-scale invasion began in 2022. The €54 million from the EBRD will help the company purchase backup power systems, maintain signaling equipment, and keep trains running when the national grid fails.
Operational Lifeline Under Fire
For passengers like Olena Kovalenko, a 34-year-old teacher from Kharkiv who regularly travels to Lviv, the funding means she can still rely on trains when other transport stops. "When the lights go out, the buses don't run, but the trains have kept going," she said in a recent interview with local media. The EBRD loan specifically targets the railway's vulnerability to blackouts, which have become more frequent as Russia targets energy infrastructure. Ukrainian Railways reported that power outages caused 47 service disruptions in March alone, stranding thousands of passengers.
Institutional Support Amid Crisis
The EBRD, a multilateral development bank focused on Eastern Europe and Central Asia, has been one of Ukraine's most consistent financial backers since the war began. This latest loan brings the bank's total railway-sector support to Ukraine to over €300 million since 2022. The agreement was signed in Kyiv by EBRD Vice President Matteo Patrone and Ukrainian Railways CEO Oleksandr Pertsovskyi, according to the bank's statement. Patrone said the funding would help "maintain a critical transport artery for both civilians and the economy."
Contrasting Priorities
The timing of the loan has drawn attention because Ukrainian Railways remains in default on €200 million in bonds issued before the war. The company has not made payments on those debts since 2022, when the government imposed a moratorium on foreign debt servicing. Critics argue that new lending to a defaulted operator raises questions about financial discipline, while supporters say the war emergency justifies exceptional measures. The EBRD has not commented on the default status, focusing instead on the operational necessity of keeping trains running.
Next Steps for Implementation
Ukrainian Railways plans to use the €54 million to install diesel generators at 12 major stations and upgrade power substations along key routes connecting Kyiv, Lviv, and Odesa. The work is scheduled to begin in June, with completion expected by the end of 2026. The company also aims to purchase 30 backup locomotives that can operate without overhead power lines, ensuring service continuity during prolonged blackouts.