Big financing to modernize the Belgrade-Niš railway boosts regional connections, trade, growth and EU integration

The long-held dream of trains running smoothly across the Western Balkans could soon materialise. A €2.2 billion EU financial package for the Belgrade-Niš section of the Corridor X rail line in Serbia proves that the region is on the right track.

Thanks to these funds, travelling by train between these two Serbian cities will take less than two hours at a speed of up to 200 kmh. Currently, it takes at least six hours by train, or around three hours by car.

"When the railway was built in 1884, it took eight hours to travel and now it takes six and a half,” said Serbian President Aleksandar Vučić at the promotion of the EU financing in Belgrade on 28 February. “Nothing has changed in 130 years. Now we are changing Serbia, with the help of the European Union."

The largest EU donation for a project in Serbia

During the same occasion, the first €82.8 million investment grant, was sealed between the European Investment Bank and the Serbian Ministry of Construction, Transport and Infrastructure on a train from Belgrade towards Niš, in the presence of officials from the Serbian government, the European Union and the European Bank for Reconstruction and Development. The European Union will provide up to €598 million in grants, making it the largest EU donation for a single project in Serbia to date. The package also includes a €1.1 billion EIB loan, as well as a loan of €550 million from the European Bank for Reconstruction and Development (EBRD).

“We have picked this project because this project is capable of changing the realitiesy on the ground for the people of Serbia, for the people of southern Serbia, and with that, also for the entire region,” said Olivér Várhelyi, the European Commissioner for Enlargement Negotiations.“Because this train should bring growth and jobs,” Várhelyi added, “this train should bring investments to areas where it is most needed – in the south of Serbia. But this should also bring a new Serbia and a new region.”

Sustainable support to local partners and green projects

Upon completion, the new railway is expected to benefit more than 2.3 million passengers annually and to carry 9.4 million tonnes of cargo, creating new business and job opportunities.

EIB Global, the EU bank’s arm for operations out of the European Union, has approved €1.1 billion for this large-scale investment, which revitalises the pivotal link between the European Union and the Western Balkans, and connects central Europe with Thessaloniki, Greece, and Sofia, Bulgaria. It is part of the European Union’s €30 billion Economic and Investment Plan for the Western Balkans which aims to mobilise investments in transport, energy, and the green and digital transition, to create sustainable growth and jobs equivalent to one third of the region’s GDP. 

“The European Investment Bank is committed to provide support that is sustainable for the environment and for our partners' finances,” said Lilyana Pavlova, the EIB vice president responsible for the Western Balkans.

“That is why this partnership for the modernization of Railway Corridor X is at the heart of EIB Global,” Pavlova added. “Thanks to the blending of our funds, grants and technical assistance from the Western Balkans Investment Framework and European Union’s Instrument for Pre-Accession, we have been able to get this project off the ground faster and provide the most competitive financing offer.”

To date, the European Investment Bank has invested over €1.2 billion in the rail sector as one of the largest financers of the transport sector in the region, supporting economic cooperation and connectivity.

Safer, greener and more efficient travel options Serbia

The rehabilitation of the Belgrade-Niš railway will improve Serbia’s connections to other European rail networks. It will facilitate faster freight transport and significantly reduce commuting time. As rail is a clean mode of transport, the modernisation of the railway system also contributes to a cleaner environment.

“Modernising rail infrastructure and making rail transport safer and more efficient is one of our priorities in the Western Balkans and a key enabler for the region’s economic development,” said Matteo Colangeli, EBRD director for the Western Balkans. “We have a long-standing commitment to the Serbian rail sector, and we are pleased to team up with the European Union and the EIB on this landmark project.”

Transport projects funded by the EU in Serbia aim to improve connections and, thus, boost economic integration – for Serbia into the region, and for the region into the EU. They contribute to railway reform and to the introduction of modern, cost-effective road infrastructure maintenance.