CORRIDOR VIII RAIL - EASTERN SECTION MK

Promoter – Financial Intermediary

PUBLIC ENTERPRISE FOR RAILWAY INFRASTRUCTURE RAILWAYS OF REPUBLIC OF NORTH MACEDONIA - SKOPJE

Location

• North Macedonia

Description

The project concerns the construction of the Eastern Section (Phase III) of Corridor VIII railway, linking the city of Kriva Palanka to the Bulgarian border.

Additionality and Impact

The project concerns the construction of 24km of railway line between Kriva Palanka and the border with Bulgaria as well as the electrification of the 88km section from Kumanovo to the border. The project is part of the phased completion of Corridor VIII rail and, in combination with other projects, will allow traffic to flow more directly between Sofia and Skopje, avoiding a current 120 km detour through Nis in Serbia. The project will conform with EU standards, including for rail interoperability.

The project is expected to support the shift of traffic to more sustainable transport modes and to reduce related negative transport externalities, thus addressing important market failures. The project is fully aligned with EU transport policy and the Green Agenda, is included in the list of Global Gateway priorities as well as a priority in the country's national strategy. The project contributes to several Sustainable Development Goals (SDG), including SDG 9 on infrastructure and SDG 11 on sustainable cities and communities.

The project will improve cross border connectivity and generate operating cost savings, road safety and environmental benefits as well as time savings. The project will also improve the financial sustainability of the sector by allowing for more effective use of existing assets, so as to increase sector revenues.

The EIB loan will provide favourable financing terms and conditions and will be complemented with financing from EBRD and investment and technical assistance grants from the Western Balkans Investment Framework (WBIF) and Instrument for Pre-Accession Assistance (IPA). The Bank's presence ensures compliance with EU policies and international standards, offering valuable technical and financial advice to the Promoter.

Objectives

In line with EU policies outside the EU concerning the development of social and economic infrastructure, the project will contribute to support economic growth and environmental sustainability by improving transport services, promoting modal shift and reducing pollution. In particular, by connecting the railway networks of North Macedonia and Bulgaria, it will improve the rail infrastructure along the Trans-European Transport Network (TEN-T) Core Network Extension to the Western Balkans. Additionally, once the other missing links will be completed, it will also connect the ports of Durres on the Adriatic Coast and Burgas on the Black Sea, thus facilitating the creation of a multimodal transport corridor in Southeast Europe.

Sector(s)

• Transport - Transportation and storage

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 364 million

Total cost (Approximate amount)

EUR 569 million

Environmental aspects

The project falls under Annex I of Directive 2014/52/EU, amending the Environmental Impact Assessment (EIA) Directive 2011/92/EU. It has been subject to an Environmental Impact Assessment (EIA) and the Competent Authority has issued its positive Environmental Decision. The EIA and other safeguard documentation will be updated and brought into compliance with current EIB standards and further reviewed during appraisal. The project's potential impacts on protected areas and species, and related compliance with the Habitats Directive (92/43/EEC) and Birds Directive (2009/147/EC) are to be appraised further. Any potential resettlement will be limited and undertaken in accordance with local law and EIB Standards.

Procurement

The promoter has to ensure that implementation of the project will be done in accordance with the EIB's Guide to Procurement and the relevant applicable EU public procurement rules.

Status

Signed - 18/12/2023