Croatia: EIB commits €400 million in green funding to modernise railways

• The loan is part of the EIB’s largest lending operation for Croatia to date, amounting to €900 million in approved financing for the railway sector.
• EIB funding to facilitate investments worth over €2.6 billion in support of a major railway upgrade and rolling stock in the country.
• Support for the overhaul and modernisation of Croatia’s railways to encourage shift to clean transport.

As part of its largest ever framework loan agreement in Croatia, the European Investment Bank (EIB) has signed a €400 million contract with the Ministry of Finance for a major upgrade of the country’s railway network and rolling stock.

The first tranche of the EIB’s €900 million approved financing provides favourable long-term funding, alongside EU grants, which will boost sustainable transport and a shift from roads to rail and thus significantly improve safety for passengers, while reducing traffic congestion, air pollution and greenhouse gas emissions.

The EIB funding will be used for the rehabilitation, modernisation, expansion and improvement of the railway infrastructure and rolling stock in the country. It will support investments of about €2.6 billion aimed at revamping Croatia’s railways and provide safer, faster, more efficient, and greener transport solutions to its citizens.

The EIB’s first sector-dedicated financial facility for Croatia will enable smart, sustainable and safe forms of transport and connectivity, which are needed to support the priorities of balanced growth and better regional integration.

“The loan signed today marks a significant milestone in our successful partnership with Croatia. This is the largest EIB financing ever agreed since the start of our operations here in 1977. I am very happy that we can help Croatia address the twin challenges of decarbonisation and digitalisation of the transport sector. Railways are one of the safest, low-emission means of transport and we are proud to support Croatia in its ambitious plan to develop a modern railway system for the benefit of the people, businesses and the environment, in line with our common EU goals to ensure a greener and more secure future,” said EIB Vice-President Teresa Czerwińska.   

“This is another contribution to the good cooperation that our ministry has with the EIB. Funds from this loan will enable us to make further investments in railway infrastructure, for the renovation and construction of local and regional railways — those parts of the network that we cannot finance with EU grants. This is extremely important to us and shows the intention and determination of our ministry and the government to continue to invest massively in the entire railway system, in which over the next ten years we expect major investments from all available funds,” said Oleg Butković, Croatia’s deputy Prime Minister and Minister of the Sea, Transport and Infrastructure.

“The financing agreement represents substantial support that the European Investment Bank is set to provide for the implementation of the project for the revitalisation of the railway system of the Republic of Croatia, and it is also a part of the financial structure of the entire project, which is currently estimated at €2.6 billion. Other financial sources include EU funds and, partially, own funds. These figures indicate the strong commitment of our government to invest in the country’s railway infrastructure and transport system, as well as the EIB's ability to co-finance EU projects. Finally, this financing agreement confirms the continuity of our excellent and successful cooperation, the result of which is €7.7 billion that have been invested by the EIB in the public and private sector in Croatia since 2001,” said Marko Primorac, Minister of Finance of the Republic of Croatia.

Under the agreement, the national railway infrastructure company Hrvatske željeznice Infrastruktura (HŽI) will carry out projects for the rehabilitation and modernisation of the railway network, and the national passenger train operator Hrvatske željeznice Putnički prijevoz (HŽPP) will be in charge of acquisition of the rolling stock. Both companies will work under the supervision of the Ministry of the Sea, Transport and Infrastructure.

The EIB has provided technical and advisory support to the Ministry of the Sea, Transport and Infrastructure under the EU Joint Assistance to Support Projects in European Regions (JASPERS) programme for the preparation of railway projects. The EIB will continue to provide its expertise and assistance for the projects’ successful implementation.

Background information

EIB

The European Investment Bank (ElB) finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB's financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank's commitment to fostering inclusive growth and the convergence of living standards.