All agreed loans

Lithuania. AB Lietuvos gelezinkeliai

Date of loan: 15 Jul 2014
Country: Lithuania
Customer: AB Lietuvos gelezinkeliai
Amount in EUR: EUR 53.3 million
Maturity: 18 years
NACE sector / loan type: Transport via railways
Business area: Infrastructure, transportation and telecom

Environmental effect

This loan contributes to climate change mitigation: 100%

Project

The loan has been provided for the construction of a European-gauge railroad track and the renewal and modernisation of parts of the Trans-European rail corridors. The investment projects are co-financed from EU structural funds.

The company is building 115 kilometres of European-gauge (1,435 mm) railroad track from the Lithuanian–Polish border to the city of Kaunas in southern Lithuania. The new track will be built parallel to the existing wider-gauge (1,520 mm) track without land acquisition for a designed speed of up to 120 km/h. The project also includes the reconstruction of a 60-kilometre wider-gauge stretch from the city of Šiauliai to the Lithuanian–Latvian border in the northern part of the country, again for speeds of up to 120 km/h.

The loan will also finance the renewal and modernisation of the Kiev–Minsk–Vilnius–Klaipeda and Kaunas–Kaliningrad branches of the Trans-European east–west corridor, and Tallinn–Riga–Šiauliai–Taurage–Kaliningrad in the north–south corridor. These corridors cover about 90% of all railway transit cargo and about 70% of railway passenger transportation in Lithuania.

The programme includes a number of smaller-scale subprojects, such as the reconstruction of railway sections, building second tracks and installation of a signalling system.

AB Lietuvos gelezinkeliai (Lithuanian Railways) is a state-owned company that administers the public railway infrastructure and provides freight and passenger transportation services. Lithuania’s total railway network measures 1,767 kilometres. The main commodities transported on rail through Lithuania are oil and its products as well as mineral fertilisers.

Fulfilment of NIB's mandate

Competitiveness: The projects are aimed at improving the country’s railway infrastructure. The main benefits are higher speed, greater capacity, improved safety and reliability. The estimated value of annual time savings in passenger and freight transportation is EUR1.6 million and EUR5.5 million, respectively. These savings are based on estimates for 2015 and 2016. The value of time savings might increase considerably in the coming years. Lower costs of transportation, particularly in freight traffic, will improve market efficiency across sectors in the Baltic region.

Environment: Railway transportation is far more environmentally efficient than most other modes of transport. Assuming that the added rail traffic replaces road transport, extensive reduction of greenhouse gases emissions are expected as a result of the project.

Sustainability summary

Key environmental issues connected to the subprojects include land issues, the generation of noise, contamination and the drainage of surface water. NIB has concluded that AB Lietuvos Gelezinkeliai has a reliable internal system for ensuring all necessary environmental and social measures are taken adequately.

Press release

Šiaurės investicijų bankas teikia naują paskolą „Lietuvos geležinkeliams“